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Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Mar. 31, 2014	May 01, 2014
Document Document And Entity Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2
Trading Symbol	ARWR
Entity Registrant Name	ARROWHEAD RESEARCH CORP
Entity Central Index Key	0000879407
Current Fiscal Year End Date	--09-30
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		51,872,371

Consolidated Balance Sheets - USD ($)	Mar. 31, 2014	Sep. 30, 2013
CURRENT ASSETS
Cash and cash equivalents	$ 142,847,860	$ 19,114,444
Trade receivable		75,000
Prepaid expenses	643,023	532,354
Other current assets	633,807	91,660
Short term investments	17,798,475	9,030,261
TOTAL CURRENT ASSETS	161,923,165	28,843,719
Property and equipment, net	3,290,270	3,513,235
Intangible assets, net	3,213,186	3,240,513
Investments	34,048,359	1,702,153
Other assets	166,414	30,011
TOTAL ASSETS	202,641,394	37,329,631
CURRENT LIABILITIES
Accounts payable	2,511,572	1,199,632
Accrued expenses	913,856	638,884
Accrued payroll and benefits	732,131	905,771
Deferred revenue	65,625	103,125
Derivative liabilities	4,936,530	4,096,363
Capital lease obligation	212,234	221,345
Notes payable	1,050,000	971,557
Other current liabilities	60,592	588,343
TOTAL CURRENT LIABILITIES	10,482,540	8,725,020
LONG-TERM LIABILITIES
Notes payable, net of current portion		50,000
Capital lease obligation, net of current portion	865,777	1,061,113
Other non-current liabilities	1,755,520	1,758,709
TOTAL LONG-TERM LIABILITIES	2,621,297	2,869,822
Commitments and contingencies
STOCKHOLDERS’ EQUITY
Preferred stock, $0.001 par value; 5,000,000 shares authorized; 21,291 and 9,900 shares issued and outstanding as of March 31, 2014 and September 30, 2013, respectively	21	10
Common stock, $0.001 par value; 145,000,000 shares authorized; 51,867,071 and 32,489,444 shares issued and outstanding as of March 31, 2014 and September 30, 2013, respectively	144,237	124,859
Additional paid-in capital	381,966,576	193,514,766
Accumulated deficit during the development stage	(190,711,800)	(166,140,969)
Total Arrowhead Research Corporation stockholders' equity	191,399,034	27,498,666
Noncontrolling interest	(1,861,477)	(1,763,877)
TOTAL STOCKHOLDERS’ EQUITY	189,537,557	25,734,789
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 202,641,394	$ 37,329,631

Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2014	Sep. 30, 2013
Statement Consolidated Balance Sheets Parenthetical [Line Items]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	21,291	9,900
Preferred stock, shares outstanding	21,291	9,900
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	145,000,000	145,000,000
Common stock, shares issued	51,867,071	32,489,444
Common stock, shares outstanding	51,867,071	32,489,444

Consolidated Statements of Operations - USD ($)	3 Months Ended		6 Months Ended		131 Months Ended
Consolidated Statements of Operations - USD ($)	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014
Statement Consolidated Statements Of Operations [Line Items]
REVENUE	$ 43,750	$ 43,750	$ 87,500	$ 202,766	$ 4,516,600
OPERATING EXPENSES
Salaries and payroll-related costs	3,097,902	1,725,176	5,179,693	3,354,599	38,239,492
General and administrative expenses	1,347,677	779,970	2,261,461	1,697,646	37,103,540
Research and development	5,216,446	2,125,019	8,349,460	3,701,685	59,673,835
Stock-based compensation	1,198,444	355,108	1,719,582	750,782	16,837,321
Depreciation and amortization	395,779	448,765	799,184	898,362	9,959,882
Impairment expense					1,308,047
Contingent consideration - fair value adjustments					1,421,652
TOTAL OPERATING EXPENSES	11,256,248	5,434,038	18,309,380	10,403,074	164,543,769
OPERATING LOSS	(11,212,498)	(5,390,288)	(18,221,880)	(10,200,308)	(160,027,169)
OTHER INCOME (EXPENSE)
Equity in income (loss) of unconsolidated affiliates	(9,597)	(157,612)	(148,053)	(221,169)	(1,752,601)
Impairment of investment in unconsolidated affiliates					(1,642,775)
Gain on purchase of Roche Madison					1,576,107
Gain (loss) on sale of fixed assets, net	(5,316)	(54,932)	(58,878)	(36,440)	(1,341,731)
Realized and unrealized gain (loss) in marketable securities					62,954
Interest income (expense), net	119,390	(27,567)	159,968	(20,151)	2,812,502
Change in value of derivatives	(2,951,225)	(29,403)	(6,470,803)	14,873	(8,489,788)
Gain on sale of stock in subsidiary					2,292,800
Other income (expense)	76,546	(1,279,881)	71,215	(1,257,196)	(676,760)
TOTAL OTHER INCOME (EXPENSE)	(2,770,202)	(1,549,395)	(6,446,551)	(1,520,083)	(7,159,292)
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	(13,982,700)	(6,939,683)	(24,668,431)	(11,720,391)	(167,186,461)
Provision for income taxes
LOSS FROM CONTINUING OPERATIONS	(13,982,700)	(6,939,683)	(24,668,431)	(11,720,391)	(167,186,461)
Income (loss) from discontinued operations		(336)		(354)	(47,546,996)
Gain on disposal of discontinued operations					4,708,588
NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS		(336)		(354)	(42,838,408)
NET LOSS	(13,982,700)	(6,940,019)	(24,668,431)	(11,720,745)	(210,024,869)
Net loss attributable to noncontrolling interests	40,179	182,082	97,600	348,650	19,477,029
NET LOSS ATTRIBUTABLE TO ARROWHEAD	$ (13,942,521)	$ (6,757,937)	$ (24,570,831)	$ (11,372,095)	$ (190,547,840)
NET LOSS PER SHARE ATTRIBUTABLE TO ARROWHEAD SHAREHOLDERS - BASIC & DILUTED:	$ (0.31)	$ (0.41)	$ (0.60)	$ (0.74)
Weighted average shares outstanding - basic and diluted	44,321,847	16,461,693	40,941,903	15,272,703

Consolidated Statement of Stockholders' Equity - USD ($)	Total	Common Stock	Preferred Stock	Additional Paid-in Capital	Subscriptions Receivable	Accumulated Deficit during Development Stage	Noncontrolling Interest	Issued For Cash At Zero Point Zero One Dollars Per Unit	Issued For Cash At Zero Point Zero One Dollars Per Unit Common Stock	Issued For Cash At Ten Dollar Per Unit	Issued For Cash At Ten Dollar Per Unit Common Stock	Issued For Cash At Ten Dollar Per Unit Additional Paid-in Capital	Stock Issuance Cost Charged To Additional Paid In Capital	Stock Issuance Cost Charged To Additional Paid In Capital Additional Paid-in Capital	Issued For Marketable Securities At Ten Dollar Per Unit	Issued For Marketable Securities At Ten Dollar Per Unit Common Stock	Issued For Marketable Securities At Ten Dollar Per Unit Additional Paid-in Capital	Issued For Cash At Fifteen Dollar Per Unit	Issued For Cash At Fifteen Dollar Per Unit Common Stock	Issued For Cash At Fifteen Dollar Per Unit Additional Paid-in Capital	Equity Issued in Business Combination	Equity Issued in Business Combination Common Stock	Equity Issued in Business Combination Additional Paid-in Capital	Issued As Gift For Ten Dollar And Ninety Cents Per Share	Issued As Gift For Ten Dollar And Ninety Cents Per Share Common Stock	Issued As Gift For Ten Dollar And Ninety Cents Per Share Additional Paid-in Capital	Issued As Stock Issuance Cost At Fifteen Dollar Per Unit	Issued As Stock Issuance Cost At Fifteen Dollar Per Unit Common Stock	Issued As Stock Issuance Cost At Fifteen Dollar Per Unit Additional Paid-in Capital	Exercised At Two Dollar Per Share	Exercised At Two Dollar Per Share Common Stock	Exercised At Two Dollar Per Share Additional Paid-in Capital	Exercised At Ten Dollar Per Share	Exercised At Ten Dollar Per Share Common Stock	Exercised At Ten Dollar Per Share Additional Paid-in Capital	Exercised At Fifteen Dollar Per Share	Exercised At Fifteen Dollar Per Share Common Stock	Exercised At Fifteen Dollar Per Share Additional Paid-in Capital	Issued To Purchase Insert Therapeutics Share At Thirty Nine Dollars And Eighty Cents Per Share	Issued To Purchase Insert Therapeutics Share At Thirty Nine Dollars And Eighty Cents Per Share Common Stock	Issued To Purchase Insert Therapeutics Share At Thirty Nine Dollars And Eighty Cents Per Share Additional Paid-in Capital	Issued At Forty Eight Dollars And Eighty Cents Per Share	Issued At Forty Eight Dollars And Eighty Cents Per Share Common Stock	Issued At Forty Eight Dollars And Eighty Cents Per Share Additional Paid-in Capital	Issued At Thirty Eight Dollars And Forty Cents Per Share	Issued At Thirty Eight Dollars And Forty Cents Per Share Common Stock	Issued At Thirty Eight Dollars And Forty Cents Per Share Additional Paid-in Capital	Issued At Thirty Five Dollars Per Share	Issued At Thirty Five Dollars Per Share Common Stock	Issued At Thirty Five Dollars Per Share Additional Paid-in Capital	Issued At Fifty Nine Dollars And Ten Cents Per Share	Issued At Fifty Nine Dollars And Ten Cents Per Share Common Stock	Issued At Fifty Nine Dollars And Ten Cents Per Share Additional Paid-in Capital	Issued To Purchase Calando Pharmaceuticals Inc At Fifty One Dollars And Seventy Cents Per Share	Issued To Purchase Calando Pharmaceuticals Inc At Fifty One Dollars And Seventy Cents Per Share Common Stock	Issued To Purchase Calando Pharmaceuticals Inc At Fifty One Dollars And Seventy Cents Per Share Additional Paid-in Capital	Issued At Fifty Seven Dollars And Eighty Cents Per Share	Issued At Fifty Seven Dollars And Eighty Cents Per Share Common Stock	Issued At Fifty Seven Dollars And Eighty Cents Per Share Additional Paid-in Capital	Issued For Purchase Of Carbon Nanotechnologies Inc At Thirty Seven Dollars And Seventy Cents Per Share	Issued For Purchase Of Carbon Nanotechnologies Inc At Thirty Seven Dollars And Seventy Cents Per Share Common Stock	Issued For Purchase Of Carbon Nanotechnologies Inc At Thirty Seven Dollars And Seventy Cents Per Share Additional Paid-in Capital	Issued At Approximately Eighteen Dollar Per Share Net	Issued At Approximately Eighteen Dollar Per Share Net Common Stock	Issued At Approximately Eighteen Dollar Per Share Net Additional Paid-in Capital	Issued At Twenty Seven Dollars And Twenty Cents Per Share To Rice University	Issued At Twenty Seven Dollars And Twenty Cents Per Share To Rice University Common Stock	Issued At Twenty Seven Dollars And Twenty Cents Per Share To Rice University Additional Paid-in Capital	Issued At Twenty Eight Dollars And Thirty Cents Per Share To Purchase Shares Of Unidym Inc	Issued At Twenty Eight Dollars And Thirty Cents Per Share To Purchase Shares Of Unidym Inc Common Stock	Issued At Twenty Eight Dollars And Thirty Cents Per Share To Purchase Shares Of Unidym Inc Additional Paid-in Capital	Issued At Twenty Nine Dollars And Fifty Cents Per Share To Purchase Masa Energy Llc	Issued At Twenty Nine Dollars And Fifty Cents Per Share To Purchase Masa Energy Llc Common Stock	Issued At Twenty Nine Dollars And Fifty Cents Per Share To Purchase Masa Energy Llc Additional Paid-in Capital	Issued At Twenty One Dollars And Ninety Cents Per Share To Unidym For Acquisition Of Nanoconduction	Issued At Twenty One Dollars And Ninety Cents Per Share To Unidym For Acquisition Of Nanoconduction Common Stock	Issued At Twenty One Dollars And Ninety Cents Per Share To Unidym For Acquisition Of Nanoconduction Additional Paid-in Capital	Issued At Twenty One Dollars And Eighty Cents Per Share	Issued At Twenty One Dollars And Eighty Cents Per Share Common Stock	Issued At Twenty One Dollars And Eighty Cents Per Share Additional Paid-in Capital	Issued At Five Dollars And Fifty Cents Per Share To Unidym Stockholder In Exchange For Unidym S Shares	Issued At Five Dollars And Fifty Cents Per Share To Unidym Stockholder In Exchange For Unidym S Shares Common Stock	Issued At Five Dollars And Fifty Cents Per Share To Unidym Stockholder In Exchange For Unidym S Shares Additional Paid-in Capital	Issued At Five Dollars And Twenty Cents Per Share To Tel Ventures In Exchange For Unidym S Shares	Issued At Five Dollars And Twenty Cents Per Share To Tel Ventures In Exchange For Unidym S Shares Common Stock	Issued At Five Dollars And Twenty Cents Per Share To Tel Ventures In Exchange For Unidym S Shares Additional Paid-in Capital	Arrowheads Increase In Proportionate Share Of Calandos Equity	Arrowheads Increase In Proportionate Share Of Calandos Equity Additional Paid-in Capital	Issued At Three Dollars Per Share	Issued At Three Dollars Per Share Common Stock	Issued At Three Dollars Per Share Additional Paid-in Capital	Issued To Unidym Stockholders In Exchange For Unidyms Shares Common Stock	Issued To Unidym Stockholders In Exchange For Unidyms Shares Additional Paid-in Capital	Issued To Unidym Stockholders In Exchange For Unidyms Shares Subscriptions Receivable	Issued To Unidym Stockholders In Exchange For Unidyms Shares Noncontrolling Interest	Issued at $6.34 per share	Issued at $6.34 per share Common Stock	Issued at $6.34 per share Additional Paid-in Capital	Issued at $13.12 per share	Issued at $13.12 per share Common Stock	Issued at $13.12 per share Additional Paid-in Capital	Issued To Calando Stockholders In Exchange For Calando S Shares	Issued To Calando Stockholders In Exchange For Calando S Shares Common Stock	Issued To Calando Stockholders In Exchange For Calando S Shares Additional Paid-in Capital	Issued To Calando Stockholders In Exchange For Calando S Shares Noncontrolling Interest	Issued at $3.80 per share	Issued at $3.80 per share Common Stock	Issued at $3.80 per share Additional Paid-in Capital	Issued at $3.80 per share Subscriptions Receivable	Issuance Of Common Stock For Subscription Additional Paid-in Capital	Issuance Of Common Stock For Subscription Subscriptions Receivable	Issued at $3.70 per share	Issued at $3.70 per share Common Stock	Issued at $3.70 per share Additional Paid-in Capital	Issued at $4.00 per share	Issued at $4.00 per share Common Stock	Issued at $4.00 per share Additional Paid-in Capital	Issued at $6.23 per share	Issued at $6.23 per share Common Stock	Issued at $6.23 per share Additional Paid-in Capital	Issued at $5.11 per share	Issued at $5.11 per share Common Stock	Issued at $5.11 per share Additional Paid-in Capital	Issued at $2.76 per share	Issued at $2.76 per share Common Stock	Issued at $2.76 per share Additional Paid-in Capital	Issued at $2.76 per share Subscriptions Receivable	Issued Under Committed Capital Agreement Common Stock	Issued Under Committed Capital Agreement Additional Paid-in Capital	Preferred Stock Issued At Thousand Dollars Per Share	Preferred Stock Issued At Thousand Dollars Per Share Preferred Stock	Preferred Stock Issued At Thousand Dollars Per Share Additional Paid-in Capital	Issued at $4.49 per share	Issued at $4.49 per share Common Stock	Issued at $4.49 per share Additional Paid-in Capital	Issued at $2.26 per share	Issued at $2.26 per share Common Stock	Issued at $2.26 per share Additional Paid-in Capital	Issued at $2.12 per share	Issued at $2.12 per share Common Stock	Issued at $2.12 per share Additional Paid-in Capital	Issued at $1.83 per share	Issued at $1.83 per share Common Stock	Issued at $1.83 per share Additional Paid-in Capital	Issued At $5.86 per share	Issued At $5.86 per share Common Stock	Issued At $5.86 per share Additional Paid-in Capital	Issued At Eighteen Dollar And Ninety Five Per Share	Issued At Eighteen Dollar And Ninety Five Per Share Common Stock	Issued At Eighteen Dollar And Ninety Five Per Share Additional Paid-in Capital	Issued To Galloway	Issued To Galloway Common Stock	Issued To Galloway Additional Paid-in Capital
Beginning Balance Amount at Sep. 30, 2002
Issuance and sold of Common Stock									300,000		168,000
Stock issuances								$ 3,000	$ 3,000	$ 1,680,000	$ 1,680	$ 1,678,320
Stock issuance cost charged to additional paid-in capital													$ (168,000)	$ (168,000)
Net loss	(95,238)					(95,238)
Ending Balance Amount at Sep. 30, 2003	1,419,762	$ 4,680		1,510,320		(95,238)
Ending Balance Shares at Sep. 30, 2003		468,000
Issuance and sold of Common Stock											47,500					50,000			660,879			70,553			15,000			35,623
Stock issuances										$ 475,000	$ 475	$ 474,525			$ 500,000	$ 500	$ 499,500	$ 9,913,182	$ 6,609	$ 9,906,573	$ (150,469)	$ 706	$ (151,175)	$ 162,750	$ 163	$ 162,587	$ 534,344	$ 356	$ 533,988
Stock issuance cost charged to additional paid-in capital	(991,318)			(991,318)									$ (96,500)	$ (96,500)
Net loss	(751,255)					(2,528,954)	1,777,699
Ending Balance Amount at Sep. 30, 2004	11,227,149	$ 13,645		12,059,997		(2,624,192)	1,777,699
Ending Balance Shares at Sep. 30, 2004		1,363,155
Stock options exercised		7,500																													7,500			600
Stock options exercised, Amount	15,000	$ 75		14,925																										$ 15,000	$ 75	$ 14,925	$ 6,000	$ 6	$ 5,994
Stock-based compensation	175,653			175,653
Issuance and sold of Common Stock																																		50,226						1,250
Stock issuances	50,000	12		49,988																																			$ 2,000,000	$ 502	$ 1,999,498
Net loss	(6,733,427)					(6,854,918)	121,491
Ending Balance Amount at Sep. 30, 2005	28,026,657	$ 27,997		35,578,580		(9,479,110)	1,899,190
Ending Balance Shares at Sep. 30, 2005		2,798,419
Stock options exercised		1,381,289																																			2,500
Stock options exercised, Amount																																	$ 25,000	$ 25	$ 24,975	$ 20,719,335	$ 13,813	$ 20,705,522
Stock-based compensation	508,513			508,513
Adjustments to additional paid in capital, reallocation of noncontrolling interest	230,087			230,087
Issuance and sold of Common Stock																																											20,485			1,500			559,000			2,536			20,838
Stock issuances																																										$ 1,000,000	$ 205	$ 999,795	$ 57,600	$ 15	$ 57,585	$ 19,545,000	$ 5,590	$ 19,539,410	$ 150,000	$ 25	$ 149,975	$ 1,077,333	$ 208	$ 1,077,125
Net loss	(19,961,961)					(18,997,209)	(964,752)
Ending Balance Amount at Sep. 30, 2006	31,605,644	$ 34,156		59,113,369		(28,476,319)	934,438
Ending Balance Shares at Sep. 30, 2006		3,414,359
Stock options exercised		11,579
Stock options exercised, Amount	341,537	$ 116		341,421
Stock-based compensation	1,369,478			1,369,478
Issuance and sold of Common Stock																																																										284,945			143,122
Stock issuances																																																									$ 15,152,215	$ 2,849	$ 15,149,366	$ 5,400,000	$ 1,431	$ 5,398,569
Net loss	(30,712,947)					(29,931,118)	(781,829)
Ending Balance Amount at Sep. 30, 2007	26,456,577	$ 38,622		84,672,783		(58,407,437)	152,609
Ending Balance Shares at Sep. 30, 2007		3,861,042
Stock options exercised		18,616
Stock options exercised, Amount	434,727	$ 186		434,541
Stock-based compensation	2,175,544			2,175,544
Adjustments to additional paid in capital, reallocation of noncontrolling interest	2,401,394			2,401,394
Issuance and sold of Common Stock																																																																386,399			5,000			7,055			10,505			11,416			1,500
Stock issuances																																																															$ 6,960,585	$ 3,867	$ 6,956,718	$ 136,000	$ 50	$ 135,950	$ 200,000	$ 71	$ 199,929	$ 310,000	$ 105	$ 309,895	$ 250,000	$ 114	$ 249,886	$ 32,700	$ 15	$ 32,685
Net loss	(27,241,639)					(27,089,030)	(152,609)
Ending Balance Amount at Sep. 30, 2008	12,302,609	$ 42,950		97,756,126		(85,496,467)
Ending Balance Shares at Sep. 30, 2008		4,293,452
Stock options exercised		10,536
Stock options exercised, Amount	290,027	$ 106		289,921
Stock-based compensation	3,187,397			3,187,397
Adjustments to additional paid in capital, reallocation of noncontrolling interest	1,720,962			1,720,962
Issuance and sold of Common Stock																																																																																		205,839			222,222					919,664
Stock issuances																																																																																	$ 1,133,676	$ 2,059	$ 1,131,617	$ 1,158,333	$ 2,222	$ 1,156,111			$ 2,758,993	$ 9,197	$ 2,749,796
Net loss	(19,308,392)					(19,308,392)
Ending Balance Amount at Sep. 30, 2009	4,857,936	$ 56,428		110,070,327	(300,000.00)	(104,968,819)
Ending Balance Shares at Sep. 30, 2009		5,641,177
Stock-based compensation	2,676,170			2,676,170
Adjustments to additional paid in capital, reallocation of noncontrolling interest	16,297			16,297																																																																																			$ 2,120,250	$ 2,120,250
Reclassification of former Unidym mezzanine debt to equity	2,000,000			2,000,000
Issuance of preferred stock in subsidiary																																																																																													$ 300,000	$ (300,000)
Amortization of discount on Unidym Series D Preferred Stock				163,960		(163,960)
Issuance and sold of Common Stock		225,189																																																																																										15,318					508,343			659,299			122,000
Stock issuances	1,066,050	$ 2,250		1,063,600			200																																																																																					$ 153	$ (1,435)		$ 1,282	$ 3,222,896	$ 5,083	$ 3,217,813	$ 7,868,578	$ 6,593	$ 7,861,985		$ 1,220	$ (160,667)	$ 159,447
Net loss	(6,957,038)					(5,774,048)	(1,182,990)
Ending Balance Amount at Sep. 30, 2010	8,078,295	$ 71,734		119,716,834		(110,742,867)	(967,406)
Ending Balance Shares at Sep. 30, 2010		7,172,014
Stock options exercised		688
Stock options exercised, Amount	7,631	$ 7		7,624
Stock-based compensation	1,582,149			1,582,149
Issuance of preferred stock in subsidiary	300,000				300,000
Divestiture of Unidym	300,000			245,345			54,655
Establish derivative liability	(4,169,907)			(4,169,907)
Issuance and sold of Common Stock		8,656																																																																																																									1,458,917
Stock issuances	43,279	$ 87		43,192																																																																																																						$ 4,643,684	$ 14,574	$ 4,629,110		$ 900,000	$ (900,000)
Net loss	(3,492,399)					(3,128,885)	(363,514)
Ending Balance Amount at Sep. 30, 2011	12,564,167	$ 86,422		127,476,436	(900,000.00)	(113,871,752)	(226,938)
Ending Balance Shares at Sep. 30, 2011		8,642,286
Stock options exercised		2,700
Stock options exercised, Amount	13,884	$ 27		13,857
Stock-based compensation	1,404,640			1,404,640
Adjustments to additional paid in capital, reallocation of noncontrolling interest				(849,707)			849,707
Issuance of preferred stock in subsidiary	1,618,509			1,618,509
Divestiture of Unidym	254,275						254,275
Issuance and sold of Common Stock		15,511																				1,217,159																																																																																					138,158						675,000			100,000			83,211			97,831			2,260,869			68,926			1,015
Stock issuances	50,406	$ 16		50,390																	$ 6,147,830	$ 9,332	$ 6,138,498																																																																																			$ 425,000	$ 1,382	$ 523,618	$ (100,000)			$ 2,247,750	$ 6,750	$ 2,241,000	$ 400,000	$ 1,000	$ 399,000	$ 500,001	$ 83	$ 499,918	$ 500,001	$ 98	$ 499,903	$ 5,796,240	$ 2,261	$ 5,809,979	$ (16,000)	$ 689	$ (689)	$ 1,015,000	$ 1	$ 1,014,999
Net loss	(22,110,723)					(21,125,928)	(984,795)
Ending Balance Amount at Sep. 30, 2012	$ 8,808,909	$ 108,354		145,917,968	(1,016,000.00)	(134,997,680)	(1,203,733)
Ending Balance Shares at Sep. 30, 2012		13,579,185
Stock options exercised	4,883	4,583
Stock options exercised, Amount	$ 23,833	$ 45		23,788																																																																																																		$ 8,000			$ 8,000
Stock-based compensation	1,241,404			1,241,404
Fractional shares redeemed in reverse stock split		(131)
Preferred stock converted to common stock, shares		275,782	(1,015)
Preferred stock converted to common stock		$ 276	$ (1)	(275)
Issuance and sold of Common Stock		1,182,451																																																																																																																																	9,900			239,894			1,825,079			1,667,051			14,262,553
Stock issuances	2,054,599	$ 1,183		2,053,416																																																																																																																														9,900,000	$ 10	9,899,990	$ 986,049	$ 240	$ 985,809	$ 3,816,468	$ 1,825	$ 3,814,643	$ 3,256,859	$ 1,667	$ 3,255,192	$ 25,459,499	$ 14,263	$ 25,445,236
Net loss	(31,703,433)					(31,143,289)	(560,144)
Ending Balance Amount at Sep. 30, 2013	$ 25,734,789	$ 124,859	$ 10	193,514,766		(166,140,969)	(1,763,877)
Ending Balance Shares at Sep. 30, 2013		32,489,444	9,900
Stock options exercised	675	675
Stock options exercised, Amount	$ 2,579	$ 1		2,578
Stock-based compensation	1,536,271			1,536,271
Subscription payment	16,000				16,000
Subscription reversal, Shares		(267,444)
Subscription reversal		$ (2,674)		(997,326)	$ 1,000,000
Settlements related to derivative liability	1,600,989			1,600,989
Issuance and sold of Common Stock		1,869,005																																																																																																																																	46,000															3,071,672			6,325,000			131,579
Stock issuances	5,740,654	$ 1,869		5,738,785																																																																																																																														$ 46,000,000	$ 46	$ 45,999,954													$ 14,060,112	$ 3,072	$ 14,057,040	$ 112,581,559	$ 6,325	$ 112,575,234	$ 500,000	$ 132	$ 499,868
Net loss	(24,668,431)					(24,570,831)	(97,600)
Ending Balance Amount at Mar. 31, 2014	$ 189,537,557	$ 144,237	$ 21	381,966,576		$ (190,711,800)	$ (1,861,477)
Ending Balance Shares at Mar. 31, 2014		51,867,071	21,291
Stock options exercised	342,338	342,338
Stock options exercised, Amount	$ 2,238,656	$ 342		2,238,314
Stock-based compensation	1,719,582			1,719,582
Preferred stock converted to common stock, shares		7,638,033	(34,609)
Preferred stock converted to common stock		$ 7,638	$ (35)	(7,603)
Settlements related to derivative liability	$ 5,630,636			$ 5,630,636

Consolidated Statement of Stockholders' Equity (Parenthetical) - $ / shares	Mar. 31, 2014	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009	Sep. 30, 2008	Sep. 30, 2007	Sep. 30, 2006	Sep. 30, 2005	Sep. 30, 2004	Sep. 30, 2003
Issued For Cash At Zero Point Zero One Dollars Per Unit
Common stock & warrants issued for cash, price per unit												$ 0.01
Issued For Cash At Ten Dollar Per Unit
Common stock & warrants issued for cash, price per unit											$ 10.00	$ 10.00
Issued For Marketable Securities At Ten Dollar Per Unit
Common stock & warrants issued for cash, price per unit											10.00
Issued For Cash At Fifteen Dollar Per Unit
Common stock & warrants issued for cash, price per unit											15.00
Issued As Gift For Ten Dollar And Ninety Cents Per Share
Common stock & warrants issued for cash, price per unit											10.90
Issued As Stock Issuance Cost At Fifteen Dollar Per Unit
Common stock & warrants issued for cash, price per unit											15.00
Exercised At Two Dollar Per Share
Exercise of stock options, price per share											2.00
Exercised At Ten Dollar Per Share
Exercise of stock options, price per share										$ 10.00	$ 10.00
Exercised At Fifteen Dollar Per Share
Exercise of stock options, price per share										15.00
Issued To Purchase Insert Therapeutics Share At Thirty Nine Dollars And Eighty Cents Per Share
Common stock issued, par value per share										$ 39.80
Issued At Forty Eight Dollars And Eighty Cents Per Share
Common stock issued, par value per share									$ 48.80
Issued At Thirty Eight Dollars And Forty Cents Per Share
Common stock issued, par value per share									38.40
Issued At Thirty Five Dollars Per Share
Common stock issued, par value per share									35.00
Issued At Fifty Nine Dollars And Ten Cents Per Share
Common stock issued, par value per share									59.10
Issued To Purchase Calando Pharmaceuticals Inc At Fifty One Dollars And Seventy Cents Per Share
Common stock issued, par value per share									$ 51.70
Issued At Fifty Seven Dollars And Eighty Cents Per Share
Common stock issued, par value per share								$ 57.80
Issued For Purchase Of Carbon Nanotechnologies Inc At Thirty Seven Dollars And Seventy Cents Per Share
Common stock issued, par value per share								$ 37.70
Issued At Approximately Eighteen Dollar Per Share Net
Common stock issued, par value per share							$ 18.00
Issued At Twenty Seven Dollars And Twenty Cents Per Share To Rice University
Common stock issued, par value per share							27.20
Issued At Twenty Eight Dollars And Thirty Cents Per Share To Purchase Shares Of Unidym Inc
Common stock issued, par value per share							28.30
Issued At Twenty Nine Dollars And Fifty Cents Per Share To Purchase Masa Energy Llc
Common stock issued, par value per share							29.50
Issued At Twenty One Dollars And Ninety Cents Per Share To Unidym For Acquisition Of Nanoconduction
Common stock issued, par value per share							21.90
Issued At Twenty One Dollars And Eighty Cents Per Share
Common stock issued, par value per share							$ 21.80
Issued At Five Dollars And Fifty Cents Per Share To Unidym Stockholder In Exchange For Unidym S Shares
Common stock issued, par value per share						$ 5.50
Issued At Five Dollars And Twenty Cents Per Share To Tel Ventures In Exchange For Unidym S Shares
Common stock issued, par value per share						5.20
Issued At Three Dollars Per Share
Common stock issued, par value per share						$ 3.00
Issued at $6.34 per share
Common stock issued, par value per share					$ 6.34
Issued at $13.12 per share
Common stock issued, par value per share					$ 13.12
Issued at $3.80 per share
Common stock issued, par value per share			$ 3.80	$ 3.80
Issued at $3.70 per share
Common stock issued, par value per share			3.70
Issued at $4.00 per share
Common stock issued, par value per share			4.00
Issued at $6.23 per share
Common stock issued, par value per share			6.23
Issued at $5.11 per share
Common stock issued, par value per share			5.11
Issued at $2.76 per share
Common stock issued, par value per share			2.76
Preferred Stock Issued At Thousand Dollars Per Share
Preferred stock issued, par value per share	$ 1,000	$ 1,000	$ 1,000
Issued at $4.49 per share
Common stock issued, par value per share		4.49
Issued at $2.26 per share
Common stock issued, par value per share		2.26
Issued at $2.12 per share
Common stock issued, par value per share		2.12
Issued at $1.83 per share
Common stock issued, par value per share		$ 1.83
Issued At $5.86 per share
Common stock issued, par value per share	5.86
Issued At Eighteen Dollar And Ninety Five Per Share
Common stock issued, par value per share	$ 18.95

Consolidated Statements of Cash Flows - USD ($)	6 Months Ended		131 Months Ended
Consolidated Statements of Cash Flows - USD ($)	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES OF CONTINUING OPERATIONS:
Net loss	$ (24,668,431)	$ (11,720,745)	$ (210,024,869)
Net loss attributable to noncontrolling interests	97,600	348,650	19,477,029
NET LOSS ATTRIBUTABLE TO ARROWHEAD	(24,570,831)	(11,372,095)	(190,547,840)
(Income) loss from discontinued operations		354	42,838,408
Realized and unrealized (gain) loss on investments			(762,954)
Charge for bad debt allowance			2,497,300
(Gain) loss from sale of subsidiary			(306,344)
(Gain) loss on purchase of Roche Madison			(1,576,107)
(Gain) loss on disposal of fixed assets	58,878	36,440	1,341,731
Stock issued for professional services			741,632
Change in value of derivatives	6,470,803	(14,873)	8,489,788
Contingent consideration - fair value adjustments			1,421,652
Purchased in-process research and development			15,851,555
Stock-based compensation	1,719,582	750,782	16,837,321
Depreciation and amortization	799,184	898,362	9,959,882
Amortization (accretion) of note discounts, net	269,313	36,931	399,171
Gain on sale of stock in subsidiary			(2,292,800)
Noncash impairment expense		1,279,882	3,958,496
Equity in income (loss) of unconsolidated affiliates		221,169	963,407
Noncontrolling interest	(97,600)	(348,650)	(19,477,029)
Changes in operating assets and liabilities:
Receivables	75,000	9,375	109,415
Other receivables	(611,360)	1,080	(3,153,422)
Prepaid expenses	(69,608)	191,732	(505,994)
Other current assets	(136,403)	(214,318)	(301,969)
Accounts payable	1,311,947	(6,279)	2,131,904
Accrued expenses	275,370	199,242	1,024,199
Other liabilities	(214,329)	26,516	727,922
NET CASH USED IN OPERATING ACTIVITIES OF CONTINUING OPERATIONS	(14,720,054)	(8,304,350)	(109,630,676)
CASH FLOWS FROM INVESTING ACTIVITIES OF CONTINUING OPERATIONS:
Purchases of property and equipment	(607,772)	(31,468)	(4,949,961)
Proceeds from sale of investments		1,160,181	4,732,688
Proceeds from sale of fixed assets		129,454	522,192
Purchase of marketable securities	(46,365,528)		(75,674,014)
Proceeds from sale of marketable securities	5,010,238		23,898,503
Cash transferred in acquisitions/divestitures			(1,579,365)
Purchase of MASA Energy, LLC			(250,000)
Minority equity investment			(2,000,000)
Cash paid for interest in Insert			(10,150,000)
Cash obtained from interest in Insert			10,529,594
Proceeds from sale of subsidiaries			359,375
Payment for patents			(303,440)
Restricted cash			50,773
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES OF CONTINUING OPERATIONS	(41,963,062)	1,258,167	(54,813,655)
CASH FLOWS FROM FINANCING ACTIVITIES OF CONTINUING OPERATIONS:
Principal payments on capital leases	(204,448)	(106,595)	(615,855)
Proceeds from issuance of common stock, preferred stock and warrants, net	180,620,980	7,089,327	331,379,995
Proceeds from issuance of Calando debt			2,516,467
Proceeds from sale of stock in subsidiary			20,902,100
NET CASH PROVIDED BY FINANCING ACTIVITIES OF CONTINUING OPERATIONS	180,416,532	6,982,732	354,182,707
Cash flows from discontinued operations:
Operating cash flows		(354)	(46,004,141)
Investing cash flows			790,625
Financing cash flows			(1,677,000)
Net cash provided by (used in) discontinued operations:		(354)	(46,890,516)
NET INCREASE (DECREASE) IN CASH	123,733,416	(63,805)	142,847,860
CASH AT BEGINNING OF PERIOD	19,114,444	3,377,288
CASH AT END OF PERIOD	142,847,860	3,313,483	142,847,860
Supplementary disclosures:
Interest paid	$ 17,105	$ 21,828	339,837
Taxes paid			$ 742,500

Consolidated Statements of Cash Flows (Parenthetical) - USD ($)	Feb. 18, 2014	Apr. 05, 2012	Sep. 30, 2010	Mar. 31, 2010	Feb. 28, 2010	Nov. 30, 2009	Sep. 30, 2009	Sep. 28, 2009	Sep. 22, 2009	Jun. 25, 2009	Jun. 11, 2009	Aug. 08, 2008	Apr. 29, 2008	Apr. 23, 2008	Apr. 20, 2007	Mar. 31, 2006	Mar. 23, 2005
Common stock, shares issued				12,870
Warrants exercised				24,788
Issued To Galloway
Common stock, shares issued	131,579
Insert Therapeutics Inc
Common stock, shares issued																	50,226
Purchase of common shares																	7,375,000
Common stock value																	$ 2,000,000
Calando Pharmaceuticals Inc
Common stock, shares issued					8,000	114,000										20,838
Purchase of common shares					200,000	2,850,000										964,000
Common stock value						$ 706,800										$ 1,077,333
Value of common stock purchased																1,928,000
Stock purchased by cash																$ 850,667
Warrants issued					2,400	24,000
Warrants purchased					60,000	600,000
Common stock exercise value					$ 5.00
Calando Pharmaceuticals Inc \| Series A Preferred Stock
Purchase of common shares			1,562.5
Warrants issued			390,625
Common stock exercise value			$ 5.00
Carbon Nanotechnologies Inc \| Series E Preferred Stock
Common stock, shares issued															143,122
Common stock value															$ 5,400,000
Unidym Inc
Common stock, shares issued								64,227				11,411		7,054
Purchase of common shares														200,000
Common stock value								$ 398,209				$ 250,000
Stock purchased by cash														$ 200,000
Unidym Inc \| Series A Preferred Stock
Common stock, shares issued								5,574	9,149		132,462
Common stock value									$ 46,662		$ 688,802
Unidym Inc \| Series C Preferred Stock
Common stock, shares issued						15,317		636,699		194,444
Common stock value						$ 47,485				$ 972,222
Unidym Inc \| Series C One Preferred Stock
Common stock, shares issued							27,777
Common stock value							$ 186,111
MASA Energy LLC
Common stock, shares issued													10,504
Common stock value													$ 310,000
Value of common stock purchased													560,000
Stock purchased by cash													$ 250,000
Alvos Therapeutics
Common stock, shares issued		315,457

Organization and Significant Accounting Policies

6 Months Ended

Mar. 31, 2014

Organization and Significant Accounting Policies

NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Arrowhead Research Corporation is a biopharmaceutical company developing targeted RNAi therapeutics. The Company is leveraging its proprietary drug delivery technologies to develop targeted drugs based on the RNA interference mechanism that efficiently silence disease-causing genes. Arrowhead technologies also enable partners to create peptide-drug conjugates that specifically home to cell types of interest while sparing off-target tissues. Arrowhead’s pipeline includes clinical programs in chronic hepatitis B virus and obesity and partner-based programs in oncology.

Liquidity

Historically, the Company’s primary source of financing has been through the sale of securities of Arrowhead. Research and development activities have required significant capital investment since the Company’s inception and we expect our operations to continue to require cash investment in fiscal 2014 and beyond as the Company advances its research and development efforts, including clinical trials, and related drug manufacturing.

At March 31, 2014, the Company had $142.8 million in cash to fund operations. In addition to its cash resources, the Company has invested excess cash in investment grade commercial bonds maturing in less than 30 months. These bonds provide a source of liquidity, though the Company plans to hold them until maturity. At March 31, 2014, the Company had invested $51.8 million in bonds. During the six months ended March 31, 2014, the Company’s cash position increased by $123.7 million. The Company received cash from the issuance of equity of $172.6 million and cash from the exercise of warrants and options of $8.0 million during the six months ended March 31, 2014. Net cash invested in fixed income investments totaled a net change of $41.4 million. During the six months ended March 31, 2014, the Company had cash outflow of $14.7 million related to its continuing operating activities and capital expenditures of $0.6 million.

Summary of Significant Accounting Policies

Principles of Consolidation—The consolidated financial statements include the accounts of Arrowhead and its Subsidiaries. Arrowhead’s primary operating subsidiary is Arrowhead Madison, which is located in Madison, Wisconsin, where the Company’s research and development facilities are located. All significant intercompany accounts and transactions are eliminated in consolidation, and noncontrolling interests are accounted for in the Company’s financial statements.

Basis of Presentation—The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, the financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, including normal recurring accruals, considered necessary for a fair presentation have been included. Interim results are not necessarily indicative of results for a full year. The September 30, 2013 balance sheet was derived from audited financial statements, but does not include all disclosures required by GAAP. This financial information should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2013. Certain reclassifications have been made to prior period financial statements to conform to the current period presentation.

Use of Estimates—The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the accompanying financial statements. Actual results could differ from those estimates.

Cash and Cash Equivalents—The Company considers all liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. The Company had no restricted cash at March 31, 2014 and 2013.

Concentration of Credit Risk—The Company maintains several checking accounts for its operations at two financial institutions. These accounts are insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000 per account. Management believes the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which these deposits are held.

Investments—The Company invests excess cash balances in short-term and long-term marketable debt securities. Investments may consist of certificates of deposits, money market accounts, government-sponsored enterprise securities, corporate bonds and/or commercial paper. The Company accounts for its investment in marketable securities in accordance with FASB ASC 320, Investments – Debt and Equity Securities. This statement requires certain securities to be classified into three categories:

Held-to-maturity—Debt securities that the entity has the positive intent and ability to hold to maturity are reported at amortized cost.

Trading Securities—Debt and equity securities that are bought and held primarily for the purpose of selling in the near term are reported at fair value, with unrealized gains and losses included in earnings.

Available-for-Sale—Debt and equity securities not classified as either securities held-to-maturity or trading securities are reported at fair value with unrealized gains or losses excluded from earnings and reported as a separate component of shareholders’ equity.

The Company classifies its investments in marketable debt securities based on the facts and circumstances present at the time of purchase of the securities. At March 31, 2014, the Company classified all of its investments as held-to-maturity.

Held-to-maturity investments are measured and recorded at amortized cost on the Company’s Consolidated Balance Sheet. Discounts and premiums to par value of the debt securities are amortized to interest income/expense over the term of the security. No gains or losses on investment securities are realized until they are sold or a decline in fair value is determined to be other-than-temporary.

As of March 31, 2014, all short-term investments were comprised of corporate bonds with maturity dates of less than one year. Certain investments maturing in excess of twelve months, but less than 30 months are classified as long-term investments. As of March 31, 2014, the amortized cost of such bonds was $51,846,834. As of March 31, 2014, gross unrealized losses were $283,376; there were no gross unrealized gains. The total fair value of the investments at March 31, 2014 was $51,563,458.

See further information regarding fair market value of marketable debt securities in Note 11 – Fair Value Measurements, such fair market data is obtained from independent pricing services.

Property and Equipment—Property and equipment are recorded at cost, which may equal fair market value in the case of property and equipment acquired in conjunction with a business acquisition. Depreciation of property and equipment is recorded using the straight-line method over the respective useful lives of the assets ranging from three to seven years. Leasehold improvements are amortized over the lesser of the expected useful life or the remaining lease term. Long-lived assets, including property and equipment are reviewed for impairment whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable.

Intangible Assets Subject to Amortization—At March 31, 2014, intangible assets subject to amortization included certain license agreements acquired through business combinations. Intangible assets subject to amortization are reviewed for impairment whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable.

In-Process Research & Development (IPR&D)—IPR&D assets represent capitalized on-going research projects that Arrowhead acquired through business combinations. Such assets are initially measured at their acquisition date fair values. The amounts capitalized are being accounted for as indefinite-lived intangible assets, subject to impairment testing until completion or abandonment of R&D efforts associated with the project. Upon successful completion of a project, Arrowhead will make a determination as to the then remaining useful life of the intangible asset and begin amortization. Based on early adoption of ASU 2012-02, Arrowhead tests its indefinite-lived assets for impairment at least annually, through a two-step process. The first step is a qualitative assessment to determine if it is more likely than not that the indefinite lived assets are impaired. Arrowhead considers relevant events and circumstances that could affect the inputs used to determine the fair value of the intangible assets. If the qualitative assessment indicates that it is more likely than not that the intangible assets is impaired, a second step is performed which is a quantitative test to determine the fair value of the intangible asset. If the carrying amount of the intangible assets exceeds its fair value, an impairment loss is recorded in the amount of that excess. If circumstances determine that it is appropriate, the Company may also elect to bypass step one, and proceed directly to the second step.

Contingent Consideration - The consideration for our acquisitions often includes future payments that are contingent upon the occurrence of a particular event. For example, milestone payments might be based on the achievement of various regulatory approvals or future sales milestones, and royalty payments might be based on drug product sales levels. We record a contingent consideration obligation for such contingent payments at fair value on the acquisition date. We estimate the fair value of contingent consideration obligations through valuation models designed to estimate the probability of such contingent payments based on various assumptions and incorporating estimated success rates. Estimated payments are discounted using present value techniques to arrive at estimated fair value at the balance sheet date. Changes in the fair value of our contingent consideration obligations are recognized within our consolidated statements of operations. Changes in the fair value of the contingent consideration obligations can result from changes to one or multiple inputs, including adjustments to the discount rates, changes in the amount or timing of expected expenditures associated with product development, changes in the amount or timing of cash flows from products upon commercialization, changes in the assumed achievement or timing of any development milestones, changes in the probability of certain clinical events and changes in the assumed probability associated with regulatory approval. These fair value measurements are based on significant inputs not observable in the market. Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for each subsequent period. Accordingly, changes in assumptions could have a material impact on the amount of contingent consideration expense we record in any given period.

Minority Equity Investments—The Company’s had a minority equity investment in Leonardo, a privately held biotechnology company. This investment has been fully impaired and the net book value at March 31, 2014 is $0. The operations of Leonardo ceased in December 2013.

Noncontrolling Interests in Majority-Owned Subsidiaries—Operating losses applicable to majority-owned Calando, Ablaris and, prior to its disposal, Unidym have periodically exceeded the noncontrolling interests in the equity capital of either Subsidiary. Such excess losses applicable to the noncontrolling interests have been and are borne by the Company as there is no obligation of the noncontrolling interests to fund any losses in excess of their original investment. There is also no obligation or commitment on the part of the Company to fund operating losses of any Subsidiary whether wholly-owned or majority-owned. The Company allocates the noncontrolling interest’s share of net loss in excess of the noncontrolling interest’s initial investment in accordance with FASB ASC 810-10.

When there is a change in the Company’s proportionate ownership share of a development-stage Subsidiary resulting from additional equity transactions in the Subsidiary, the change is accounted for as an equity transaction in consolidation. To the extent that the increase in the calculated value of the Company’s interest in the equity of the Subsidiary exceeds the Company’s investment in the transaction, that increase in value is referred to as the Company’s “increase in its proportionate share of the Subsidiary’s equity” and the amount is recorded as an increase in the Company’s Additional Paid-in Capital.

Revenue Recognition—Revenue from license fees are recorded when persuasive evidence of an arrangement exists, title has passed or services have been rendered, a price is fixed and determinable, and collection is reasonably assured. We may generate revenue from product sales, technology licenses, collaborative research and development arrangements, and research grants. Revenue under technology licenses and collaborative agreements typically consists of nonrefundable and/or guaranteed technology license fees, collaborative research funding and various milestone and future product royalty or profit-sharing payments.

Revenue associated payments under collaborative research and development agreements, is recognized ratably over the relevant periods specified in the agreement, generally the period during which research and development is conducted. Revenue from up-front license fees, milestones and product royalties are recognized as earned based on the completion of the milestones and product sales, as defined in the respective agreements. Payments received in advance of recognition as revenue are recorded as deferred revenue.

Allowance for Doubtful Accounts—The Company accrues an allowance for doubtful accounts based on estimates of uncollectible revenues by analyzing historical collections, accounts receivable aging and other factors. Accounts receivable are written off when all collection attempts have failed.

Research and Development—Costs and expenses that can be clearly identified as research and development are charged to expense as incurred in accordance with FASB ASC 730-10.

Earnings (Loss) per Share—Basic earnings (loss) per share is computed using the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share are computed using the weighted-average number of common shares and dilutive potential common shares outstanding during the period. Dilutive potential common shares primarily consist of stock options issued to employees and consultants and warrants to purchase Common Stock of the Company.

Stock-Based Compensation—The Company accounts for share-based compensation arrangements in accordance with FASB ASC 718, which requires the measurement and recognition of compensation expense for all share-based payment awards to be based on estimated fair values. We use the Black-Scholes option valuation model to estimate the fair value of our stock options at the date of grant. The Black-Scholes option valuation model requires the input of subjective assumptions to calculate the value of stock options. We use historical data and other information to estimate the expected price volatility and the expected forfeiture rate.

Derivative Assets and Liabilities - We account for warrants and other derivative financial instruments as either equity or assets/liabilities based upon the characteristics and provisions of each instrument. Warrants classified as equity are recorded as additional paid-in capital on our consolidated balance sheet and no further adjustments to their valuation are made. Some of our warrants were determined to be ineligible for equity classification because of provisions that may result in an adjustment to their exercise price. Warrants classified as derivative liabilities and other derivative financial instruments that require separate accounting as assets or liabilities are recorded on our consolidated balance sheet at their fair value on the date of issuance and are revalued on each subsequent balance sheet date until such instruments are exercised or expire, with any changes in the fair value between reporting periods recorded as other income or expense. We estimate the fair value of these assets/liabilities using option pricing models that are based on the individual characteristics of the warrants or instruments on the valuation date, as well as assumptions for expected volatility, expected life and risk-free interest rate.

Income Taxes—The Company accounts for income taxes under the liability method, which requires the recognition of deferred income tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred income tax assets to the amount expected to be realized. The provision for income taxes, if any, represents the tax payable for the period and the change in deferred income tax assets and liabilities during the period.

Recently Issued Accounting Standards

In July 2013, the FASB issued ASU 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists, which eliminates diversity in practice for the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss or a tax credit carryforward is available to reduce the taxable income or tax payable that would result from disallowance of a tax position. ASU 2013-11 affects only the presentation of such amounts in an entity’s balance sheet and is effective for fiscal years beginning after December 15, 2013 and interim periods within those years. Early adoption is permitted. We are evaluating the impact, if any, of the adoption of ASU 2013-11 on our balance sheet.

Investments

6 Months Ended

Mar. 31, 2014

Investments

NOTE 2. INVESTMENTS

The Company invests its excess cash balances in short-term and long-term debt securities. Investments at March 31, 2014 consisted of corporate bonds with maturities remaining of less than three years at the time of purchase. The Company may also invest excess cash balances in certificates of deposit, money market accounts, US Treasuries, US government agency obligations, corporate debt securities, and/or commercial paper. The Company accounts for its investments in accordance with FASB ASC 320, Investments – Debt and Equity Securities. At March 31, 2014, all investments were classified as held-to-maturity securities.

The following tables summarize the Company’s short and long-term investments as of March 31, 2014, and September 30, 2013.

	As of March 31, 2014
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Commercial notes (due within one year)	$	17,798,475	$	—	$	(115,181	)	$	17,683,294
Commercial notes (due after one year through two years)	$	34,048,359		—	$	(168,195	)	$	33,880,164
Total	$	51,846,834	$	—	$	(283,376	)	$	51,563,458

	As of September 30, 2013
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Commercial notes (due within one year)	$	9,030,261	$	7,500	$	(39,281	)	$	8,998,480
Commercial notes (due after one year through two years)	$	1,702,153		—	$	(2,362	)	$	1,699,791
Total	$	10,732,414	$	7,500	$	(41,643	)	$	10,698,271

Fixed Assets

6 Months Ended

Mar. 31, 2014

Fixed Assets

NOTE 3. FIXED ASSETS

Property, equipment and other fixed assets are recorded at cost, which may equal fair market value in the case of property and equipment acquired in conjunction with a business acquisition. Depreciation of property and equipment is recorded using the straight-line method over the respective useful lives of the assets ranging from three to seven years. Leasehold improvements are amortized over the lesser of the expected useful life or the remaining lease term.

	Balance as of
	March 31, 2014			September 30, 2013
Computers, office equipment and furniture		317,867			323,376
Research equipment		3,826,494			3,452,013
Software		69,623			69,623
Leasehold improvements		2,749,409			2,749,409
Total gross fixed assets		6,963,393			6,594,421
Less: Accumulated depreciation and amortization		(3,673,123	)		(3,081,186	)
Property and equipment, net		3,290,270			3,513,235

Acquisitions

6 Months Ended

Mar. 31, 2014

Acquisitions

NOTE 4. ACQUISITIONS

Roche Madison

On October 21, 2011, the Company entered into a Stock and Asset Purchase Agreement (the “RNAi Purchase Agreement”) with Hoffmann-La Roche Inc. and F Hoffmann-La Roche Ltd (collectively, “Roche”), pursuant to which the Company purchased from Roche (i) all of the outstanding common stock of Roche Madison Inc. (“Roche Madison”, now “Arrowhead Madison”) and (ii) the intellectual property rights then held by Roche related to its RNAi business and identified in the RNAi Purchase Agreement (the “Transaction”). In consideration for the purchase of Roche Madison and the Roche RNAi assets, the Company issued to Roche a promissory note with a principal value of $50,000 and 1,288,158 shares of Common Stock.

Pursuant to the RNAi Purchase Agreement, Roche has a right of first negotiation on certain product candidates developed by the Company and its affiliates relating to the purchased assets. If the Company proposes to out-license or enters into substantive negotiations to out-license, any Clinical Candidate or Existing Candidate (as such terms are defined in the RNAi Purchase Agreement), the Company must give notice of the Candidate it proposes to out-license and negotiate exclusively and in good faith with Roche for 90 days regarding the applicable out-license. This right of first negotiation applies to all Existing Candidates (as defined in the RNAi Purchase Agreement) and the first five Clinical Candidates for which the Company delivers notice to Roche and subsequently enters into an out-license.

In addition to the consideration paid by the Company as per the closing terms, the Company is obligated to make certain royalty and milestone payments to Roche upon the occurrence of certain events. For certain product candidates that are developed by the Company that are covered by a valid claim by the patent rights transferred in the Transaction for which the Company and Roche do not enter into a licensing arrangement, the Company will be obligated to pay a 3% royalty on Net Sales (as defined in the RNAi Purchase Agreement), provided that the royalty rate may be reduced or offset in certain circumstances. The obligation to pay royalties on such candidates will last until the later of (i) the expiration of the last to expire patent right related to such product candidate that was transferred in the Transaction and (ii) ten years after the first commercial sale of such product candidate.

The Company will also be obligated to make cash payments to Roche upon the achievement of various milestones for certain clinical candidates, for which the Company and Roche do not enter into a licensing arrangement, including the first regulatory approval in certain jurisdictions, and upon certain annual sales milestones for candidates that receive regulatory approval. The potential payments range from $2,500,000 to $6,000,000 per milestone. At the time of acquisition, the Company’s estimate of future payments for potential royalties and milestones had a net present value of $84,935 which was recorded as contingent consideration as a part of other noncurrent liabilities. Contingent consideration is calculated by modeling research and development activities for clinical candidates, forecasting timelines to market, and using “peak sales” estimate modeling, cash flows and potential milestone and royalty payments are calculated. The modeling assumes certain success rates, and discount factors related to riskiness of projects and the time value of money to calculate a net present value of future consideration payments to Roche. These estimates are based on many unknown variables that are difficult to estimate, and due to the extended process of drug development prior to marketing of drug candidates, the models must extend many years into the future. Such predictions are inherently uncertain. Each year, the Company re-evaluates its contingent consideration, and if material, makes adjustments to the recorded liability. Any adjustment to the contingent consideration liability is reflected in the Company’s Statement of Operations. During fiscal 2013, the contingent consideration liability was increased by $1.4 million, which is recorded as a part of other noncurrent liabilities on the Company’s Consolidated Balance Sheet. For additional information related to our valuation of this obligation, see Note 11, Fair Value Measurements.

- Definition

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

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+ Details

Intangible Assets

6 Months Ended

Mar. 31, 2014

Intangible Assets

NOTE 5. INTANGIBLE ASSETS

Intangible assets consist of in-process research and development (“IPR&D”) not subject to amortization, and other intangible assets subject to amortization, which were capitalized as a part of a business combination.

IPR&D represents projects that have not yet received regulatory approval and are required to be classified as indefinite assets until the successful completion or the abandonment of the associated R&D efforts. Accordingly, during the development period after the date of acquisition, these assets will not be amortized until approval is obtained in one or more jurisdictions which, individually or combined, are expected to generate a significant portion of the total revenue expected to be earned by an IPR&D project. At that time, we will determine the useful life of the asset, reclassify the asset out of IPR&D and begin amortization. If the associated R&D effort is abandoned the related IPR&D assets will likely be written off and we would record an impairment loss.

Intangible assets subject to amortization include patents capitalized as part of a business combination as well as license agreements capitalized as part of a business combination from the acquisition of Roche Madison. The license agreements are being amortized over the estimated life remaining at the time of acquisition which was 4 years. Patents are amortized over a period of three years to twenty years. The weighted average original amortization period is twelve years. Amortization of license agreements and patents is expected to be approximately $55,000 for fiscal years 2014 and 2015, $13,000 in 2016, and zero thereafter.

We review amounts capitalized as IPR&D for impairment at least annually in the fourth quarter, and whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. In the event the carrying value of the assets is not expected to be recovered, the assets are written down to their estimated fair values. We continue to test our indefinite-lived IPR&D assets for potential impairment until the projects are completed or abandoned.

The following table provides details on our intangible asset balances:

	Intangible assets not subject to amortization		Intangible assets subject to amortization			Total Intangible assets
Balance at September 30, 2011	$	-	$	1,731,211		$	1,731,211
Additions—Madison acquisition		944,935		230,000			1,174,935
Additions—Alvos acquisition		2,172,387		-			2,172,387
Amortization		-		(293,964	)		(293,964	)
Balance at September 30, 2012	$	3,117,322	$	1,667,247		$	4,784,569
Impairment		-		(1,308,047	)		(1,308,047	)
Amortization		-		(236,009	)		(236,009	)
Balance at September 30, 2013	$	3,117,322	$	123,191		$	3,240,513
Amortization		-		(27,327	)		(27,327	)
Balance at March 31, 2014	$	3,117,322	$	95,864		$	3,213,186

Investment in Subsidiaries

6 Months Ended

Mar. 31, 2014

Investment in Subsidiaries

NOTE 6. INVESTMENT IN SUBSIDIARIES

In addition to 100% ownership interest in Arrowhead Madison Inc., Arrowhead also maintains majority ownership in Calando Pharmaceuticals, Ablaris Therapeutics, Inc., and a minority investment in Leonardo Biosystems, Inc.

Calando Pharmaceuticals, Inc.

Calando is a developer of polymer delivery systems for siRNA and small molecule based therapeutics. Calando’s current cash resources preclude additional development of its platform technology and therapeutic candidates. Arrowhead has determined that it will not provide substantial further investment to Calando based on Arrowhead evaluation of Calando’s development and business prospects and Calando has been unsuccessful in its efforts to obtain capital from other sources. Calando has ceased operations and terminated its technology license with the California Institute of Technology on which its siRNA therapeutic development efforts were based. Further, pursuant to an involuntary petition by an unpaid Noteholder, Calando is undergoing Chapter 7 bankruptcy proceedings.

In 2009, Calando outlicensed its small molecule program to Cerulean Pharma, Inc., a Boston, MA-based biotech company which has continued the development of the program. Under the license, as the development program progresses, Calando could collect partnership, milestone and royalty programs from Cerulean.

Calando has an outstanding promissory note with a balance of principal and interest totaling $1,210,000 as of March 31, 2014. The promissory note became due November 26, 2013; see Note 7 for further information.

As of March 31, 2014, Calando owed to Arrowhead $4.6 million under a series of 8% simple interest notes and advances. It is unlikely these notes will be repaid in full. The balance of the notes and advances is eliminated in consolidation. In fiscal 2013, the Calando patent estate was returned to Caltech, and the Calando technology is not being pursued.

As of March 31, 2014, Arrowhead owned 79% of the outstanding shares of Calando and 76% on a fully diluted basis. As a result of the pending bankruptcy proceeding for Calando, we do not expect our equity ownership to result in any return of capital as part of the liquidation of Calando. .

Ablaris Therapeutics, Inc.

Ablaris was formed and began operations in fiscal 2011, based on the license of certain anti-obesity technology developed at the MD Anderson Cancer Center at the University of Texas. During fiscal 2011, Ablaris raised $2.9 million in cash, of which $1.3 million was invested by Arrowhead and $1.6 million was invested by outside investors, through the issuance of Ablaris Series A Preferred stock.

As of March 31, 2014, Arrowhead owned 64% of the outstanding shares of Ablaris and 64% on a fully diluted basis.

Leonardo Biosystems, Inc.

Leonardo, a privately-held drug-delivery company in which Arrowhead has a 3% ownership interest, ceased operations in December 2013. Arrowhead’s investment in Leonardo and its receivable from Leonardo have been fully reserved.

Notes Payable

6 Months Ended

Mar. 31, 2014

Notes Payable

NOTE 7. NOTES PAYABLE

On November 26, 2008, Calando entered into Unsecured Convertible Promissory Note Agreements (“Notes”) for $2.5 million with accredited investors and Arrowhead, which invested $200,000 in the Notes offering. Arrowhead subsequently invested an additional $600,000 in the same offering. Except for one Note in the principal amount of $500,000, all Notes and accrued interest were converted into a total of 2,950 shares of Calando Series A Preferred Stock on June 23, 2009. The remaining Note had a 10% interest rate, matured on November 26, 2010, and was renegotiated and extended until November 26, 2013. The terms of the new note include a 10% interest rate and require two times principal payment at maturity. The interest rate while the Note is in default is 15%. The Note became due on November 26, 2013, but was not repaid due to lack of cash resources at Calando. At March 31, 2014, the Note is reflected on the balance sheet at the maturity amount of $1.0 million. Accrued interest in the amount of $210,000 is reflected as a part of accrued expenses on the Company’s Consolidated Balance Sheet. The holder of the Note initiated an involuntary petition of bankruptcy against Calando; Arrowhead did not object. A trustee has been appointed and a meeting of Calando creditors has occurred. It is expected that the trustee will dispose of Calando assets, primarily its license agreement with Cerulean. We cannot estimate the proceeds from the disposition of Calando’s assets, nor how it will be distributed amongst its various creditors, which includes Arrowhead and the holder of the Note.

Stockholders' Equity

6 Months Ended

Mar. 31, 2014

Stockholders' Equity

NOTE 8. STOCKHOLDERS’ EQUITY

At March 31, 2014, the Company had a total of 150,000,000 shares of capital stock authorized for issuance, consisting of 145,000,000 shares of Common Stock, par value $0.001, and 5,000,000 shares of Preferred Stock, par value $0.001.

At March 31, 2014, 51,867,071 shares of Common Stock were outstanding. Additionally, 21,291 shares of Preferred Stock were outstanding, including 5,291 shares of Series B Preferred Stock, convertible into 2,891,257 shares of Common Stock, and 16,000 shares of Series C Preferred Stock, convertible into 2,730,375 shares of Common Stock, (collectively, the “Outstanding Preferred Stock”). At March 31, 2014, 3,451,210 shares were reserved for issuance upon exercise of options granted under Arrowhead’s 2000 Stock Option Plan, 2004 Equity Incentive Plan, and 2013 Incentive Plan, as well as for inducement grants made to new employees.

The Outstanding Preferred Stock is convertible to Common Stock by each holder at its stated conversion price, subject to a 9.99% beneficial ownership limit for each holder. The holders of Outstanding Preferred Stock are eligible to vote with the Common Stock of the Company on an as-converted basis, but only to the extent they are eligible for conversion without exceeding the 9.99% ownership limitation. The Outstanding Preferred Stock does not carry a coupon, but is entitled to receive dividends on a pari passu basis with the Common Stock, when and if declared. In any liquidation or dissolution of the Company, the holders of Outstanding Preferred Stock are entitled to participate in the distribution of the assets, to the extent legally available for distribution, on a pari passu basis with the Common Stock.

On October 20, 2011, the Company and Lincoln Park Capital Fund, LLC, an Illinois limited liability company (“LPC”) entered into a $15 million purchase agreement (the “Purchase Agreement”), whereby LPC agreed to purchase up to $15 million of Common Stock, subject to certain limitations, from time to time during the three-year term of the Purchase Agreement. The Company has the right, in its sole discretion, over a 36-month period to sell up to $15 million of Common Stock (subject to certain limitations) to LPC, depending on certain conditions as set forth in the Purchase Agreement. As of March 31, 2014, the Company had drawn $1 million from the facility.

On October 21, 2011 and October 24, 2011, the Company entered into Subscription Agreements with certain accredited investors (the “Series A Purchasers”), pursuant to which the Company issued and sold an aggregate of 1,015 shares of Series A Preferred Convertible Stock, $0.001 par value per share, at a purchase price of $1,000 per share. The aggregate purchase price paid for the shares of Series A Preferred was $1,015,000. On February 16, 2012, upon approval by the Company’s shareholders, 1,015 shares of Arrowhead Series A Preferred Convertible Stock, $0.001 par value per share, were converted to 275,782 shares of Common Stock.

On October 21, 2011, the Company entered into a Subscription Agreement with an accredited investor, pursuant to which the Company issued and sold an aggregate of 675,000 shares of Common Stock, $0.001 par value per share, at a purchase price of $3.70 per share. The aggregate purchase price paid by the purchaser for the shares of Common Stock is $2,497,500.

On August 10, 2012 the Company sold 2,260,869 units at a price of $2.76 per unit. Each unit consisted of one share of common stock and a warrant to purchase 0.75 shares of common stock at an exercise price of $3.25. Gross proceeds from the offering were $6.2 million excluding offering fees and expenses.

In December 2012, the Company sold 1,825,079 units at a price of $2.26 per unit. Each unit consisted of one share of common stock and a warrant to purchase 0.5 shares of common stock. Gross proceeds from the offering were $4.1 million excluding offering fees and expenses. The exercise price of these warrants was $1.83 as of September 30, 2013, and may decrease based on certain specified events. As a result, the Company determined these warrants were ineligible for equity classification. Refer to Note 11 for further discussion regarding these warrants.

In January 2013, the Company sold 1,667,051 units at a price of $2.12 per unit. Each unit consisted of one share of common stock and a warrant to purchase 0.5 shares of common stock. Gross proceeds from the offering were $3.5 million excluding offering fees and expenses. The exercise price of these warrants was $1.83 as of September 30, 2013, and may decrease based on certain specified events. As a result, the Company determined these warrants were ineligible for equity classification. Refer to Note 11 for further discussion regarding these warrants.

In May 2013, the Company sold 14.3 million shares of Arrowhead common stock at a price of $1.83 per share and 9,900 shares of Arrowhead series B convertible preferred stock at a price of $1,000 per share. The series B preferred stock is convertible into common stock at a conversion price of $1.83. Gross proceeds were $36 million. No warrants were issued in the May 2013 financing.

On October 11, 2013, the Company sold 3,071,672 shares of common stock, at a price of $5.86 per share, and 46,000 shares of Series C Convertible Preferred Stock (the “Preferred Shares”), at a price of $1,000 per share. The Preferred Shares are convertible into shares of common stock at a conversion price of $5.86. The aggregate purchase price paid by the Purchasers for the Shares and Preferred Shares was $64,000,000 and the Company received net proceeds of approximately $60,000,000, after advisory fees and offering expenses.

On February 24, 2014, the Company sold 6,325,000 shares of common stock, at a public offering price of $18.95 per share. Net proceeds were approximately $112.6 million after underwriting commissions and discounts and other offering expense.

The following table summarizes information about warrants outstanding at March 31, 2014:

Exercise prices		Number of Warrants		Remaining Life in Years
$	70.60		94,897		3.1
$	5.00		995,692		0.7
$	5.09		291,204		0.7
$	1.38		24,324		1.7
$	4.16		1,000		2.7
$	3.25		746,306		2.4
$	2.12		75,000		3.7
$	1.83		305,084		3.7
Total warrants outstanding			2,533,507

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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Reference 19: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Article 3

+ Details

Leases

6 Months Ended

Mar. 31, 2014

Leases

NOTE 9. LEASES

The Company leases office space for its corporate headquarters in Pasadena, California. In March 2014, the Company signed a lease addendum to expand its corporate headquarters. It is expected the new space will be available in August 2014. The leases for the expansion space and the current space will expire in July 2018. Rental costs, including the expansion space are approximately $22,000 per month, increasing 3% annually.

The Company’s research facility in Madison, Wisconsin is leased through February 28, 2019. Monthly rental expense is approximately $23,000. Other monthly rental expenses include common area maintenance and real estate taxes totaling approximately $15,000 per month. Utilities costs are approximately $14,000 per month. Including monthly payments recorded under a capital lease of approximately $19,000, total monthly costs are approximately $71,000 per month.

Facility and equipment rent expense, related to continuing operations, for six months ended March 31, 2014 and 2013 was $264,000 and $281,000, respectively. From inception to date, rent expense was $4,924,000.

As of March 31, 2014, future minimum lease payments due in fiscal years under capitalized leases are as follows:

2014 (remainder of)	$	114,211
2015		228,420
2016		228,420
2017		228,420
2018		228,420
2019 and thereafter		95,175
Less interest		(45,055	)
Principal		1,078,011
Less current portion		(212,234	)
Noncurrent portion	$	865,777

As of March 31, 2014, future minimum lease payments due in fiscal years under operating leases are as follows:

2014 (remainder of)	$	234,692
2015		552,028
2016		567,904
2017		583,932
2018		607,437
2019 and thereafter		393,133
Total	$	2,939,126

Stock-Based Compensation

6 Months Ended

Mar. 31, 2014

Stock-Based Compensation

NOTE 10. STOCK-BASED COMPENSATION

Arrowhead has three plans that provide for equity-based compensation. Under the 2000 Stock Option Plan, 50,750 shares of Arrowhead’s Common Stock are reserved for issuance upon exercise of non-qualified stock options. No further grants can be made under the 2000 Stock Option Plan. The 2004 Equity Incentive Plan reserves 2,735,597 shares for the grant of stock options, stock appreciation rights, restricted stock awards and performance unit/share awards to employees, consultants and others. The 2013 Incentive Plan reserves 4,000,000 shares for the grant of stock options, stock appreciation rights, restricted stock awards and performance awards to employees, consultant and others. As of March 31, 2014, there were options granted and outstanding to purchase 50,750, 2,733,595 and 615,000 shares of Common Stock under the 2000 Stock Option Plan, the 2004 Equity Incentive Plan and the 2013 Incentive Plan, respectively. Also, as of March 31, 2014, there were 417,406 shares reserved for options issued outside of equity compensation plans as inducement grants to new employees. During the six months ended March 31, 2014, no options were granted under the 2004 Equity Incentive Plan, 615,000 were issued under the 2013 Incentive Plan and 165,000 options were granted outside of equity incentive plans as inducement stock options to new employees.

The following tables summarize information about stock options:

	Unit/Share Number of Options Outstanding			Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value
Balance At September 30, 2011		729,096		$	9.03
Granted		1,229,500			4.40
Cancelled		(42,919	)		11.77
Exercised		(4,883	)		5.20
Balance At September 30, 2012		1,910,794			6.10
Granted		1,509,166			2.03
Cancelled		—			—
Exercised		(675	)		3.93
Balance At September 30, 2013		3,419,285		$	4.68
Granted		780,000			13.51
Cancelled		(40,196	)		4.68
Exercised		(342,338	)		6.54
Balance At March 31, 2014		3,816,751		$	5.81		7.5 years	$	38,622,771
Exercisable At March 31, 2014		1,351,974		$	5.91		7.2 years	$	14,710,062

Stock-based compensation expense for the six months ended March 31, 2014 and 2013 was $1,719,582 and $750,782, respectively. There is no income tax benefit as the Company is currently operating at a loss and an actual income tax benefit may not be realized. The loss creates a timing difference, resulting in a deferred tax asset, which is fully reserved by a valuation allowance.

The fair value of the options granted by the Company during the three months ended March 31, 2014 and 2013 is estimated at $7,085,656 and $103,293, respectively.

The intrinsic value of the options exercised during the six months ended March 31, 2014 and 2013 was $3,115,175 and $0, respectively; no options were exercised during the six months ended March 31, 2013.

As of March 31, 2014, the pre-tax compensation expense for all unvested stock options in the amount of approximately $17,294,117 will be recognized in our results of operations over a weighted average period of 3.5 years.

The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option pricing model. The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options, which do not have vesting restrictions and are fully transferable. The determination of the fair value of each stock option is affected by our stock price on the date of grant, as well as assumptions regarding a number of highly complex and subjective variables. Because the Company’s employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options.

The assumptions used to value stock options are as follows:

	Six months ended March 31,
	2014	2013
Dividend yield	—	—
Risk-free interest rate	1.9% to 2.26%	0.7% to 1.0%
Volatility	69%	69%
Expected life (in years)	5.5 to 6.25	5.5 to 6.25
Weighted average grant date fair value per share of options granted	$9.08	$1.31

The dividend yield is zero as the Company currently does not pay a dividend.

The risk-free interest rate is based on the U.S. Treasury bond.

Volatility is estimated based on volatility average of the Company’s Common Stock price.

Restricted Stock Units

Restricted Stock Units (RSUs) are granted under our 2013 Incentive Plan. During the quarter ended March 31, 2014, the Company issued 470,000 restricted stock units to certain members of management and certain members of its Board of Directors. At vesting each RSU will be exchanged for one share of the Company’s Common Stock. The RSUs issued to management vest in equal installments on the one and two year anniversary of the date of grant. The RSUs issued to the members of the Board of Directors vest upon the one year anniversary of the date of grant.

The following table summarizes the activity of the Company’s Restricted Stock Units:

	Number of RSUs		Weighted- Average Grant Date Fair Value
Unvested at September 30, 2013		-	$	-
Granted		470,000		14.54
Vested		-		-
Forfeited		-		-
Unvested at March 31, 2014		470,000	$	14.54

The Company recorded $570,707 and $0 of expense relating to restricted stock units during the six months ended March 31, 2014 and 2013 respectively, and such expense is included in stock-based compensation expense.

Fair Value Measurements

6 Months Ended

Mar. 31, 2014

Fair Value Measurements

NOTE 11. FAIR VALUE MEASUREMENTS

The Company measures its financial assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., exit price) in an orderly transaction between market participants at the measurement date. Additionally, the Company is required to provide disclosure and categorize assets and liabilities measured at fair value into one of three different levels depending on the assumptions (i.e., inputs) used in the valuation. Level 1 provides the most reliable measure of fair value while Level 3 generally requires significant management judgment. Financial assets and liabilities are classified in their entirety based on the lowest level of input significant to the fair value measurement. The fair value hierarchy is defined as follows:

Level 1—Valuations are based on unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2—Valuations are based on quoted prices for similar assets or liabilities in active markets, or quoted prices in markets that are not active for which significant inputs are observable, either directly or indirectly.

Level 3—Valuations are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Inputs reflect management’s best estimate of what market participants would use in valuing the asset or liability at the measurement date.

The following table summarizes fair value measurements at March 31, 2014 and September 30, 2013 for assets and liabilities measured at fair value on a recurring basis:

March 31, 2014:

	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	142,847,860	$	—	$	—	$	142,847,860
Derivative assets	$	—	$	—	$	—	$	—
Derivative liabilities	$	—	$	—	$	4,936,530	$	4,936,530
Acquisition related contingent consideration obligations	$	—	$	—	$	1,595,273	$	1,595,273

September 30, 2013:

	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	19,114,444	$	—	$	—	$	19,114,444
Derivative assets	$	—	$	—	$	—	$	—
Derivative liabilities	$	—	$	—	$	4,096,363	$	4,096,363
Acquisition related contingent consideration obligations	$	—	$	—	$	1,595,273	$	1,595,273

The Company invests its excess cash balances in short and long-term corporate bonds, generally with remaining maturities of less than two years. At March 31, 2014, the Company had short-term investments of $17,798,475, and long-term investments of $34,048,359, for a total of $51,846,834. The fair value of its investment at March 31, 2014 was $51,563,458. The Company expects to hold such investments until maturity, and thus unrealized gains and losses from the fluctuations in the fair value of the securities are not likely to be realized.

As part of the proceeds from the sale of Unidym in January 2011, Arrowhead received a bond from Wisepower in the face amount of $2.5 million. The bond is convertible to Wisepower common stock at a price of $2.00 per share. The conversion feature is subject to derivative accounting as prescribed under ASC 815. Accordingly, the fair value of the conversion feature on the date of issuance was estimated using an option pricing model and recorded on the Company’s consolidated balance sheet as a derivative asset. The fair value of the conversion feature is estimated at the end of each reporting period and the change in the fair value of the conversion feature is recorded as a nonoperating gain/loss as change in value of derivatives in Company’s Consolidated Statement of Operations. During the quarter ended March 31, 2013, the trading of Wisepower stock was halted. Trading resumed in July 2013, but the trading price is significantly below the conversion price. During fiscal 2013, the Company determined that the probability of realizing value from the conversion feature was remote, and the derivative asset value was reduced to zero.

During the six months ended March 31, 2014, there was no change in the fair value of the derivative asset.

The assumptions used in valuing the derivative asset were not applicable as the value has been determined to be zero at March 31, 2014 and September 30, 2013.

	March 31, 2014	September 30, 2013
Risk free interest rate	—	—
Expected life	—	—
Dividend yield	—	—
Volatility	—	—

The following is a reconciliation of the derivative asset:

Value at September 30, 2012	$	250,250
Receipt of instruments		—
Decrease in value		(250,250	)
Net settlements		—
Value at September 30, 2013	$	—
Receipt of instruments		—
Decrease in value		—
Net settlements		—
Value at March 31, 2014	$	—

As part of an equity financing in June 2010, Arrowhead issued warrants to acquire up to 329,649 shares of Common Stock (the “2010 Warrants”), of which 24,324 warrants were outstanding at March 31, 2014, which contain a mechanism to adjust the strike price upon the issuance of certain dilutive equity securities. If during the term of the 2010 Warrants, the Company issues Common Stock at a price lower than the exercise price of the 2010 Warrants, the exercise price of the 2010 Warrants would be reduced to the amount equal to the issuance price of the Common Stock. Similarly, as part of a financing in December 2012, Arrowhead issued warrants to acquire up to 912,543 shares of Common Stock (the “2012 Warrants”) of which 265,461 warrants were outstanding at March 31, 2014, which contain a mechanism to adjust the strike price upon the issuance of certain dilutive equity securities. If during the term of the 2012 Warrants, the Company issues Common Stock at a price lower than the exercise price of the 2012 Warrants, the exercise price of the 2012 Warrants would be reduced to the amount equal to the issuance price of the Common Stock. Further, as part of a financing in January 2013, Arrowhead issued warrants to acquire up to 833,530 shares of Common Stock (the “2013 Warrants”) of which 39,623 warrants were outstanding at March 31, 2014 which contain a mechanism to adjust the strike price upon the issuance of certain dilutive equity securities. If during the term of the 2013 Warrants, the Company issues Common Stock at a price lower than the exercise price of the 2013 Warrants, the exercise price of the 2013 Warrants would be reduced to the amount equal to the issuance price of the Common Stock. As a result of these features, the 2010 Warrants, the 2012 Warrants, and the 2013 Warrants are subject to derivative accounting as prescribed under ASC 815. Accordingly, the fair value of the Warrants on the date of issuance was estimated using an option pricing model and recorded on the Company’s consolidated balance sheet as a derivative liability. The fair value of the Warrants is estimated at the end of each reporting period and the change in the fair value of the Warrants is recorded as a nonoperating gain or loss in the Company’s consolidated statement of operations. During the six months ended March 31, 2014, the Company recorded a non-cash loss from the change in fair value of the derivative liability of $9,234,419.

The assumptions used in valuing the derivative liability were as follows:

2010 Warrants	March 31, 2014	September 30, 2013
Risk free interest rate	0.44%	0.33%
Expected life	2.0 Years	2.2 Years
Dividend yield	None	None
Volatility	69%	69%

2012 Warrants	March 31, 2014	September 30, 2013
Risk free interest rate	1.31%	1.39%
Expected life	3.7 Years	4.2 Years
Dividend yield	None	None
Volatility	69%	69%

2013 Warrants	March 31, 2014	September 30, 2013
Risk free interest rate	1.31%	1.39%
Expected life	3.8 Years	4.3 Years
Dividend yield	None	None
Volatility	69%	69%

The following is a reconciliation of the derivative liability related to these warrants:

Value at September 30, 2012	$	626,195
Issuance of instruments		2,153,819
Change in value		5,066,591
Net settlements		(3,754,808	)
Value at September 30, 2013	$	4,091,797
Issuance of instruments		—
Change in value		9,234,419
Net settlements		(8,447,443)
Value at March 31, 2014	$	4,878,773

In conjunction with the financing of Ablaris in fiscal 2011, Arrowhead sold exchange rights to certain investors whereby the investors have the right to exchange their shares of Ablaris for a prescribed number of Arrowhead shares based upon a predefined ratio. The exchange rights have a seven-year term. During the first year, the exchange right allows the holder to exchange one Ablaris share for 0.06 Arrowhead shares (as adjusted for a subsequent reverse stock split). This ratio declines to 0.04 in the second year, 0.03 in the third year and 0.02 in the fourth year. In the fifth year and beyond the exchange ratio is 0.01. Exchange rights for 675,000 Ablaris shares were sold in fiscal 2011, and remain outstanding at March 31, 2014. The exchange rights are subject to derivative accounting as prescribed under ASC 815. Accordingly, the fair value of the exchange rights on the date of issuance was estimated using an option pricing model and recorded on the Company’s consolidated balance sheet as a derivative liability. The fair value of the exchange rights is estimated at the end of each reporting period and the change in the fair value of the exchange rights is recorded as a nonoperating gain or loss in the Company’s Consolidated Statement of Operations. During the six months ended March 31, 2014, the Company recorded a non-cash loss from the change in fair value of the derivative liability of $53,190.

	December 31, 2013	September 30, 2013
Risk free interest rate	1.31%	1.39%
Expected life	3.8 Years	4.3 Years
Dividend yield	None	None
Volatility	69%	69%

The following is a reconciliation of the derivative liability related to these exchange rights:

Value at September 30, 2012	$	10,375
Issuance of instruments		—
Change in value		(5,806	)
Net settlements		—
Value at September 30, 2013	$	4,569
Issuance of instruments		—
Change in value		53,190
Net settlements		—
Value at March 31, 2014	$	57,759

The derivative assets/liabilities are estimated using option pricing models that are based on the individual characteristics of the warrants or instruments on the valuation date, as well as assumptions for expected volatility, expected life and risk-free interest rate. Changes in the assumptions used could have a material impact on the resulting fair value. The primary input affecting the value of our derivatives liabilities is the Company’s stock price. Other inputs have a comparatively insignificant effect.

During fiscal 2012, contingent consideration was recorded upon the acquisitions of Roche Madison Inc. and Alvos Therapeutics, Inc., totaling $173,621. The fair value measurement of the contingent consideration obligations is determined using Level 3 inputs. The fair value of contingent consideration obligations is based on a discounted cash flow model using a probability-weighted income approach. The measurement is based upon unobservable inputs supported by little or no market activity based on our own assumptions and experience. Estimating timing to complete the development, and obtain approval of products is difficult, and there are inherent uncertainties in developing a product candidate, such as obtaining U.S. Food and Drug Administration (FDA) and other regulatory approvals. In determining the probability of regulatory approval and commercial success, we utilize data regarding similar milestone events from several sources, including industry studies and our own experience. These fair value measurements represent Level 3 measurements as they are based on significant inputs not observable in the market. Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for each subsequent period. Accordingly, changes in assumptions could have a material impact on the amount of contingent consideration expense we record in any given period. Changes in the fair value of the contingent consideration obligations are recorded in our consolidated statement of operations.

The following is a reconciliation of contingent consideration fair value.

Value at September 30, 2012	$	173,621
Purchase price contingent consideration		—
Contingent consideration payments		—
Change in fair value of contingent consideration		1,421,652
Value at September 30, 2013	$	1,595,273
Purchase price contingent consideration		—
Contingent consideration payments		—
Change in fair value of contingent consideration		—
Value at March 31, 2014	$	1,595,273

The fair value of contingent consideration obligations is estimated through valuation models designed to estimate the probability of such contingent payments based on various assumptions and incorporating estimated success rates. Estimated payments are discounted using present value techniques to arrive at estimated fair value at the balance sheet date. Changes in the fair value of the contingent consideration obligations can result from changes to one or multiple inputs, including adjustments to the discount rates, changes in the amount or timing of expected expenditures associated with product development, changes in the amount or timing of cash flows from products upon commercialization, changes in the assumed achievement or timing of any development milestones, changes in the probability of certain clinical events and changes in the assumed probability associated with regulatory approval. Each of these assumptions can have a significant impact on the calculation of contingent consideration.

The carrying amounts of the Company’s other financial instruments, which include accounts receivable, accounts payable, and accrued expenses approximate their respective fair values due to the relatively short-term nature of these instruments. The carrying value of the Company’s debt obligations approximates fair value based on market interest rates.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Organization and Significant Accounting Policies (Policies)	6 Months Ended
	Mar. 31, 2014
Nature of Business	Nature of Business Arrowhead Research Corporation is a biopharmaceutical company developing targeted RNAi therapeutics. The Company is leveraging its proprietary drug delivery technologies to develop targeted drugs based on the RNA interference mechanism that efficiently silence disease-causing genes. Arrowhead technologies also enable partners to create peptide-drug conjugates that specifically home to cell types of interest while sparing off-target tissues. Arrowhead’s pipeline includes clinical programs in chronic hepatitis B virus and obesity and partner-based programs in oncology.
Liquidity	Liquidity Historically, the Company’s primary source of financing has been through the sale of securities of Arrowhead. Research and development activities have required significant capital investment since the Company’s inception and we expect our operations to continue to require cash investment in fiscal 2014 and beyond as the Company advances its research and development efforts, including clinical trials, and related drug manufacturing. At March 31, 2014, the Company had $142.8 million in cash to fund operations. In addition to its cash resources, the Company has invested excess cash in investment grade commercial bonds maturing in less than 30 months. These bonds provide a source of liquidity, though the Company plans to hold them until maturity. At March 31, 2014, the Company had invested $51.8 million in bonds. During the six months ended March 31, 2014, the Company’s cash position increased by $123.7 million. The Company received cash from the issuance of equity of $172.6 million and cash from the exercise of warrants and options of $8.0 million during the six months ended March 31, 2014. Net cash invested in fixed income investments totaled a net change of $41.4 million. During the six months ended March 31, 2014, the Company had cash outflow of $14.7 million related to its continuing operating activities and capital expenditures of $0.6 million.
Principles of Consolidation	Principles of Consolidation—The consolidated financial statements include the accounts of Arrowhead and its Subsidiaries. Arrowhead’s primary operating subsidiary is Arrowhead Madison, which is located in Madison, Wisconsin, where the Company’s research and development facilities are located. All significant intercompany accounts and transactions are eliminated in consolidation, and noncontrolling interests are accounted for in the Company’s financial statements.
Basis of Presentation	Basis of Presentation—The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, the financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, including normal recurring accruals, considered necessary for a fair presentation have been included. Interim results are not necessarily indicative of results for a full year. The September 30, 2013 balance sheet was derived from audited financial statements, but does not include all disclosures required by GAAP. This financial information should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2013. Certain reclassifications have been made to prior period financial statements to conform to the current period presentation.
Use of Estimates	Use of Estimates—The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the accompanying financial statements. Actual results could differ from those estimates.
Cash and Cash Equivalents	Cash and Cash Equivalents—The Company considers all liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. The Company had no restricted cash at March 31, 2014 and 2013.
Concentration of Credit Risk	Concentration of Credit Risk—The Company maintains several checking accounts for its operations at two financial institutions. These accounts are insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000 per account. Management believes the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which these deposits are held.
Investments	Investments—The Company invests excess cash balances in short-term and long-term marketable debt securities. Investments may consist of certificates of deposits, money market accounts, government-sponsored enterprise securities, corporate bonds and/or commercial paper. The Company accounts for its investment in marketable securities in accordance with FASB ASC 320, Investments – Debt and Equity Securities. This statement requires certain securities to be classified into three categories: Held-to-maturity—Debt securities that the entity has the positive intent and ability to hold to maturity are reported at amortized cost. Trading Securities—Debt and equity securities that are bought and held primarily for the purpose of selling in the near term are reported at fair value, with unrealized gains and losses included in earnings. Available-for-Sale—Debt and equity securities not classified as either securities held-to-maturity or trading securities are reported at fair value with unrealized gains or losses excluded from earnings and reported as a separate component of shareholders’ equity. The Company classifies its investments in marketable debt securities based on the facts and circumstances present at the time of purchase of the securities. At March 31, 2014, the Company classified all of its investments as held-to-maturity. Held-to-maturity investments are measured and recorded at amortized cost on the Company’s Consolidated Balance Sheet. Discounts and premiums to par value of the debt securities are amortized to interest income/expense over the term of the security. No gains or losses on investment securities are realized until they are sold or a decline in fair value is determined to be other-than-temporary. As of March 31, 2014, all short-term investments were comprised of corporate bonds with maturity dates of less than one year. Certain investments maturing in excess of twelve months, but less than 30 months are classified as long-term investments. As of March 31, 2014, the amortized cost of such bonds was $51,846,834. As of March 31, 2014, gross unrealized losses were $283,376; there were no gross unrealized gains. The total fair value of the investments at March 31, 2014 was $51,563,458. See further information regarding fair market value of marketable debt securities in Note 11 – Fair Value Measurements, such fair market data is obtained from independent pricing services.
Property and Equipment	Property and Equipment—Property and equipment are recorded at cost, which may equal fair market value in the case of property and equipment acquired in conjunction with a business acquisition. Depreciation of property and equipment is recorded using the straight-line method over the respective useful lives of the assets ranging from three to seven years. Leasehold improvements are amortized over the lesser of the expected useful life or the remaining lease term. Long-lived assets, including property and equipment are reviewed for impairment whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable.
Intangible Assets subject to amortization	Intangible Assets Subject to Amortization—At March 31, 2014, intangible assets subject to amortization included certain license agreements acquired through business combinations. Intangible assets subject to amortization are reviewed for impairment whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable.
In-Process Research & Development (IPR&D)	In-Process Research & Development (IPR&D)—IPR&D assets represent capitalized on-going research projects that Arrowhead acquired through business combinations. Such assets are initially measured at their acquisition date fair values. The amounts capitalized are being accounted for as indefinite-lived intangible assets, subject to impairment testing until completion or abandonment of R&D efforts associated with the project. Upon successful completion of a project, Arrowhead will make a determination as to the then remaining useful life of the intangible asset and begin amortization. Based on early adoption of ASU 2012-02, Arrowhead tests its indefinite-lived assets for impairment at least annually, through a two-step process. The first step is a qualitative assessment to determine if it is more likely than not that the indefinite lived assets are impaired. Arrowhead considers relevant events and circumstances that could affect the inputs used to determine the fair value of the intangible assets. If the qualitative assessment indicates that it is more likely than not that the intangible assets is impaired, a second step is performed which is a quantitative test to determine the fair value of the intangible asset. If the carrying amount of the intangible assets exceeds its fair value, an impairment loss is recorded in the amount of that excess. If circumstances determine that it is appropriate, the Company may also elect to bypass step one, and proceed directly to the second step.
Contingent Consideration	Contingent Consideration - The consideration for our acquisitions often includes future payments that are contingent upon the occurrence of a particular event. For example, milestone payments might be based on the achievement of various regulatory approvals or future sales milestones, and royalty payments might be based on drug product sales levels. We record a contingent consideration obligation for such contingent payments at fair value on the acquisition date. We estimate the fair value of contingent consideration obligations through valuation models designed to estimate the probability of such contingent payments based on various assumptions and incorporating estimated success rates. Estimated payments are discounted using present value techniques to arrive at estimated fair value at the balance sheet date. Changes in the fair value of our contingent consideration obligations are recognized within our consolidated statements of operations. Changes in the fair value of the contingent consideration obligations can result from changes to one or multiple inputs, including adjustments to the discount rates, changes in the amount or timing of expected expenditures associated with product development, changes in the amount or timing of cash flows from products upon commercialization, changes in the assumed achievement or timing of any development milestones, changes in the probability of certain clinical events and changes in the assumed probability associated with regulatory approval. These fair value measurements are based on significant inputs not observable in the market. Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for each subsequent period. Accordingly, changes in assumptions could have a material impact on the amount of contingent consideration expense we record in any given period.
Minority Equity Investments	Minority Equity Investments—The Company’s had a minority equity investment in Leonardo, a privately held biotechnology company. This investment has been fully impaired and the net book value at March 31, 2014 is $0. The operations of Leonardo ceased in December 2013.
Noncontrolling Interests in Majority-Owned Subsidiaries	Noncontrolling Interests in Majority-Owned Subsidiaries—Operating losses applicable to majority-owned Calando, Ablaris and, prior to its disposal, Unidym have periodically exceeded the noncontrolling interests in the equity capital of either Subsidiary. Such excess losses applicable to the noncontrolling interests have been and are borne by the Company as there is no obligation of the noncontrolling interests to fund any losses in excess of their original investment. There is also no obligation or commitment on the part of the Company to fund operating losses of any Subsidiary whether wholly-owned or majority-owned. The Company allocates the noncontrolling interest’s share of net loss in excess of the noncontrolling interest’s initial investment in accordance with FASB ASC 810-10. When there is a change in the Company’s proportionate ownership share of a development-stage Subsidiary resulting from additional equity transactions in the Subsidiary, the change is accounted for as an equity transaction in consolidation. To the extent that the increase in the calculated value of the Company’s interest in the equity of the Subsidiary exceeds the Company’s investment in the transaction, that increase in value is referred to as the Company’s “increase in its proportionate share of the Subsidiary’s equity” and the amount is recorded as an increase in the Company’s Additional Paid-in Capital.
Revenue Recognition	Revenue Recognition—Revenue from license fees are recorded when persuasive evidence of an arrangement exists, title has passed or services have been rendered, a price is fixed and determinable, and collection is reasonably assured. We may generate revenue from product sales, technology licenses, collaborative research and development arrangements, and research grants. Revenue under technology licenses and collaborative agreements typically consists of nonrefundable and/or guaranteed technology license fees, collaborative research funding and various milestone and future product royalty or profit-sharing payments. Revenue associated payments under collaborative research and development agreements, is recognized ratably over the relevant periods specified in the agreement, generally the period during which research and development is conducted. Revenue from up-front license fees, milestones and product royalties are recognized as earned based on the completion of the milestones and product sales, as defined in the respective agreements. Payments received in advance of recognition as revenue are recorded as deferred revenue.
Allowance for Doubtful Accounts	Allowance for Doubtful Accounts—The Company accrues an allowance for doubtful accounts based on estimates of uncollectible revenues by analyzing historical collections, accounts receivable aging and other factors. Accounts receivable are written off when all collection attempts have failed.
Research and Development	Research and Development—Costs and expenses that can be clearly identified as research and development are charged to expense as incurred in accordance with FASB ASC 730-10.
Earnings (Loss) per Share	Earnings (Loss) per Share—Basic earnings (loss) per share is computed using the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share are computed using the weighted-average number of common shares and dilutive potential common shares outstanding during the period. Dilutive potential common shares primarily consist of stock options issued to employees and consultants and warrants to purchase Common Stock of the Company.
Stock-Based Compensation	Stock-Based Compensation—The Company accounts for share-based compensation arrangements in accordance with FASB ASC 718, which requires the measurement and recognition of compensation expense for all share-based payment awards to be based on estimated fair values. We use the Black-Scholes option valuation model to estimate the fair value of our stock options at the date of grant. The Black-Scholes option valuation model requires the input of subjective assumptions to calculate the value of stock options. We use historical data and other information to estimate the expected price volatility and the expected forfeiture rate.
Derivative Assets and Liabilities	Derivative Assets and Liabilities - We account for warrants and other derivative financial instruments as either equity or assets/liabilities based upon the characteristics and provisions of each instrument. Warrants classified as equity are recorded as additional paid-in capital on our consolidated balance sheet and no further adjustments to their valuation are made. Some of our warrants were determined to be ineligible for equity classification because of provisions that may result in an adjustment to their exercise price. Warrants classified as derivative liabilities and other derivative financial instruments that require separate accounting as assets or liabilities are recorded on our consolidated balance sheet at their fair value on the date of issuance and are revalued on each subsequent balance sheet date until such instruments are exercised or expire, with any changes in the fair value between reporting periods recorded as other income or expense. We estimate the fair value of these assets/liabilities using option pricing models that are based on the individual characteristics of the warrants or instruments on the valuation date, as well as assumptions for expected volatility, expected life and risk-free interest rate.
Income Taxes	Income Taxes—The Company accounts for income taxes under the liability method, which requires the recognition of deferred income tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred income tax assets to the amount expected to be realized. The provision for income taxes, if any, represents the tax payable for the period and the change in deferred income tax assets and liabilities during the period.
Recently Issued Accounting Standards	Recently Issued Accounting Standards In July 2013, the FASB issued ASU 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists, which eliminates diversity in practice for the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss or a tax credit carryforward is available to reduce the taxable income or tax payable that would result from disallowance of a tax position. ASU 2013-11 affects only the presentation of such amounts in an entity’s balance sheet and is effective for fiscal years beginning after December 15, 2013 and interim periods within those years. Early adoption is permitted. We are evaluating the impact, if any, of the adoption of ASU 2013-11 on our balance sheet.

Investments (Tables)

6 Months Ended

Mar. 31, 2014

Summary of Short and Long-term Investments

The following tables summarize the Company’s short and long-term investments as of March 31, 2014, and September 30, 2013.

	As of March 31, 2014
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Commercial notes (due within one year)	$	17,798,475	$	—	$	(115,181	)	$	17,683,294
Commercial notes (due after one year through two years)	$	34,048,359		—	$	(168,195	)	$	33,880,164
Total	$	51,846,834	$	—	$	(283,376	)	$	51,563,458

	As of September 30, 2013
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Commercial notes (due within one year)	$	9,030,261	$	7,500	$	(39,281	)	$	8,998,480
Commercial notes (due after one year through two years)	$	1,702,153		—	$	(2,362	)	$	1,699,791
Total	$	10,732,414	$	7,500	$	(41,643	)	$	10,698,271

- Definition

Tabular disclosure of all investments in certain debt and equity securities for which the entity has the positive intent and ability to hold until maturity.

+ References + Details

Fixed Assets (Tables)

6 Months Ended

Mar. 31, 2014

Summary of Property and Equipment

	Balance as of
	March 31, 2014			September 30, 2013
Computers, office equipment and furniture		317,867			323,376
Research equipment		3,826,494			3,452,013
Software		69,623			69,623
Leasehold improvements		2,749,409			2,749,409
Total gross fixed assets		6,963,393			6,594,421
Less: Accumulated depreciation and amortization		(3,673,123	)		(3,081,186	)
Property and equipment, net		3,290,270			3,513,235

Intangible Assets (Tables)

6 Months Ended

Mar. 31, 2014

Schedule of Intangible Asset

The following table provides details on our intangible asset balances:

	Intangible assets not subject to amortization		Intangible assets subject to amortization			Total Intangible assets
Balance at September 30, 2011	$	-	$	1,731,211		$	1,731,211
Additions—Madison acquisition		944,935		230,000			1,174,935
Additions—Alvos acquisition		2,172,387		-			2,172,387
Amortization		-		(293,964	)		(293,964	)
Balance at September 30, 2012	$	3,117,322	$	1,667,247		$	4,784,569
Impairment		-		(1,308,047	)		(1,308,047	)
Amortization		-		(236,009	)		(236,009	)
Balance at September 30, 2013	$	3,117,322	$	123,191		$	3,240,513
Amortization		-		(27,327	)		(27,327	)
Balance at March 31, 2014	$	3,117,322	$	95,864		$	3,213,186

Stockholders' Equity (Tables)

6 Months Ended

Mar. 31, 2014

Summary of Information about Warrants

The following table summarizes information about warrants outstanding at March 31, 2014:

Exercise prices		Number of Warrants		Remaining Life in Years
$	70.60		94,897		3.1
$	5.00		995,692		0.7
$	5.09		291,204		0.7
$	1.38		24,324		1.7
$	4.16		1,000		2.7
$	3.25		746,306		2.4
$	2.12		75,000		3.7
$	1.83		305,084		3.7
Total warrants outstanding			2,533,507

- Definition

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

+ References + Details

Leases (Tables)

6 Months Ended

Mar. 31, 2014

Future Minimum Lease Payments under Capitalized Leases

As of March 31, 2014, future minimum lease payments due in fiscal years under capitalized leases are as follows:

2014 (remainder of)	$	114,211
2015		228,420
2016		228,420
2017		228,420
2018		228,420
2019 and thereafter		95,175
Less interest		(45,055	)
Principal		1,078,011
Less current portion		(212,234	)
Noncurrent portion	$	865,777

Future Minimum Lease Payments under Operating Leases

As of March 31, 2014, future minimum lease payments due in fiscal years under operating leases are as follows:

2014 (remainder of)	$	234,692
2015		552,028
2016		567,904
2017		583,932
2018		607,437
2019 and thereafter		393,133
Total	$	2,939,126

Stock-Based Compensation (Tables)

6 Months Ended

Mar. 31, 2014

Summarize Information about Stock Options

The following tables summarize information about stock options:

	Unit/Share Number of Options Outstanding			Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value
Balance At September 30, 2011		729,096		$	9.03
Granted		1,229,500			4.40
Cancelled		(42,919	)		11.77
Exercised		(4,883	)		5.20
Balance At September 30, 2012		1,910,794			6.10
Granted		1,509,166			2.03
Cancelled		—			—
Exercised		(675	)		3.93
Balance At September 30, 2013		3,419,285		$	4.68
Granted		780,000			13.51
Cancelled		(40,196	)		4.68
Exercised		(342,338	)		6.54
Balance At March 31, 2014		3,816,751		$	5.81		7.5 years	$	38,622,771
Exercisable At March 31, 2014		1,351,974		$	5.91		7.2 years	$	14,710,062

Assumptions Used to Value Stock Options

The assumptions used to value stock options are as follows:

	Six months ended March 31,
	2014	2013
Dividend yield	—	—
Risk-free interest rate	1.9% to 2.26%	0.7% to 1.0%
Volatility	69%	69%
Expected life (in years)	5.5 to 6.25	5.5 to 6.25
Weighted average grant date fair value per share of options granted	$9.08	$1.31

Summary of Share Activity Related to Restricted Stock Units

The following table summarizes the activity of the Company’s Restricted Stock Units:

	Number of RSUs		Weighted- Average Grant Date Fair Value
Unvested at September 30, 2013		-	$	-
Granted		470,000		14.54
Vested		-		-
Forfeited		-		-
Unvested at March 31, 2014		470,000	$	14.54

Fair Value Measurements (Tables)

6 Months Ended

Mar. 31, 2014

Fair Value Measurements for Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table summarizes fair value measurements at March 31, 2014 and September 30, 2013 for assets and liabilities measured at fair value on a recurring basis:

March 31, 2014:

	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	142,847,860	$	—	$	—	$	142,847,860
Derivative assets	$	—	$	—	$	—	$	—
Derivative liabilities	$	—	$	—	$	4,936,530	$	4,936,530
Acquisition related contingent consideration obligations	$	—	$	—	$	1,595,273	$	1,595,273

September 30, 2013:

	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	19,114,444	$	—	$	—	$	19,114,444
Derivative assets	$	—	$	—	$	—	$	—
Derivative liabilities	$	—	$	—	$	4,096,363	$	4,096,363
Acquisition related contingent consideration obligations	$	—	$	—	$	1,595,273	$	1,595,273

Assumptions Used in Valuing Derivative Asset

The assumptions used in valuing the derivative asset were not applicable as the value has been determined to be zero at March 31, 2014 and September 30, 2013.

	March 31, 2014	September 30, 2013
Risk free interest rate	—	—
Expected life	—	—
Dividend yield	—	—
Volatility	—	—

Reconciliation of Derivative Asset

The following is a reconciliation of the derivative asset:

Value at September 30, 2012	$	250,250
Receipt of instruments		—
Decrease in value		(250,250	)
Net settlements		—
Value at September 30, 2013	$	—
Receipt of instruments		—
Decrease in value		—
Net settlements		—
Value at March 31, 2014	$	—

Reconciliation of Derivative Liability

The following is a reconciliation of the derivative liability related to these warrants:

Value at September 30, 2012	$	626,195
Issuance of instruments		2,153,819
Change in value		5,066,591
Net settlements		(3,754,808	)
Value at September 30, 2013	$	4,091,797
Issuance of instruments		—
Change in value		9,234,419
Net settlements		(8,447,443)
Value at March 31, 2014	$	4,878,773

Change in Fair Value of Contingent Consideration Obligations

The following is a reconciliation of contingent consideration fair value.

Value at September 30, 2012	$	173,621
Purchase price contingent consideration		—
Contingent consideration payments		—
Change in fair value of contingent consideration		1,421,652
Value at September 30, 2013	$	1,595,273
Purchase price contingent consideration		—
Contingent consideration payments		—
Change in fair value of contingent consideration		—
Value at March 31, 2014	$	1,595,273

Warrant

Assumptions Used in Valuing Derivative Liabilities

The assumptions used in valuing the derivative liability were as follows:

2010 Warrants	March 31, 2014	September 30, 2013
Risk free interest rate	0.44%	0.33%
Expected life	2.0 Years	2.2 Years
Dividend yield	None	None
Volatility	69%	69%

2012 Warrants	March 31, 2014	September 30, 2013
Risk free interest rate	1.31%	1.39%
Expected life	3.7 Years	4.2 Years
Dividend yield	None	None
Volatility	69%	69%

2013 Warrants	March 31, 2014	September 30, 2013
Risk free interest rate	1.31%	1.39%
Expected life	3.8 Years	4.3 Years
Dividend yield	None	None
Volatility	69%	69%

Exchange rights

Assumptions Used in Valuing Derivative Liabilities

	December 31, 2013	September 30, 2013
Risk free interest rate	1.31%	1.39%
Expected life	3.8 Years	4.3 Years
Dividend yield	None	None
Volatility	69%	69%

Reconciliation of Derivative Liability

The following is a reconciliation of the derivative liability related to these exchange rights:

Value at September 30, 2012	$	10,375
Issuance of instruments		—
Change in value		(5,806	)
Net settlements		—
Value at September 30, 2013	$	4,569
Issuance of instruments		—
Change in value		53,190
Net settlements		—
Value at March 31, 2014	$	57,759

Organization and Significant Accounting Policies - Additional Information (Detail) - USD ($)	1 Months Ended	6 Months Ended		12 Months Ended	131 Months Ended
	May 31, 2013	Mar. 31, 2014	Mar. 31, 2013	Sep. 30, 2013	Mar. 31, 2014	Sep. 30, 2012
Schedule Of Investments [Line Items]
Cash to fund operations		$ 142,847,860	$ 3,313,483	$ 19,114,444	$ 142,847,860	$ 3,377,288
Maturity description		Less than 30 months
Net increase (decrease) in cash		$ 123,733,416	(63,805)		142,847,860
Cash from issuance of equity	$ 36,000,000	172,600,000
Net cash invested in fixed income investments		41,400,000
Cash outflow related to continuing operating activities		14,700,000
Capital expenditures		600,000
Restricted Cash		0	$ 0		0
Amount insured in FDIC per account		250,000			250,000
Amortized cost of bonds		51,846,834		10,732,414	51,846,834
Unrealized Loss on Securities		283,376		41,643
Unrealized Gain on Securities		0		7,500
Fair value of investments		51,563,458		$ 10,698,271	51,563,458
Minority equity investment, book value		$ 0			0
Minimum
Schedule Of Investments [Line Items]
Property, Plant and Equipment, Useful Life		3 years
Maximum
Schedule Of Investments [Line Items]
Property, Plant and Equipment, Useful Life		7 years
Commercial Bonds
Schedule Of Investments [Line Items]
Maturity description		Less than 30 months
Investments		$ 51,800,000			$ 51,800,000
Warrants Issued
Schedule Of Investments [Line Items]
Cash from exercise of Warrants		$ 8,000,000

Investments - Summary of Short and Long-term Investments (Detail) - USD ($)	6 Months Ended	12 Months Ended
	Mar. 31, 2014	Sep. 30, 2013
Schedule Of Investments [Line Items]
Gross Unrealized Gains	$ 0	$ 7,500
Gross Unrealized Losses	(283,376)	(41,643)
Fair Value	51,563,458	10,698,271
Commercial notes (due within one year), amortized cost	17,798,475	9,030,261
Commercial notes (due after one year through two years), amortized cost	34,048,359	1,702,153
Total	51,846,834	10,732,414
Commercial Notes Due Within One Year
Schedule Of Investments [Line Items]
Gross Unrealized Gains	0	7,500
Gross Unrealized Losses	(115,181)	(39,281)
Fair Value	17,683,294	8,998,480
Commercial Notes Due After One Year Through Two Years
Schedule Of Investments [Line Items]
Gross Unrealized Gains	0
Gross Unrealized Losses	(168,195)	(2,362)
Fair Value	$ 33,880,164	$ 1,699,791

Summary of Property and Equipment (Detail) - USD ($)	Mar. 31, 2014	Sep. 30, 2013
Property Plant And Equipment [Line Items]
Computers, office equipment and furniture	$ 317,867	$ 323,376
Research equipment	3,826,494	3,452,013
Software	69,623	69,623
Leasehold improvements	2,749,409	2,749,409
Total gross fixed assets	6,963,393	6,594,421
Less: Accumulated depreciation and amortization	(3,673,123)	(3,081,186)
Property and equipment, net	$ 3,290,270	$ 3,513,235

Acquisitions - Additional Information (Detail) - USD ($)		1 Months Ended	6 Months Ended	12 Months Ended	131 Months Ended
	Oct. 21, 2012	Oct. 21, 2011	Mar. 31, 2014	Sep. 30, 2013	Mar. 31, 2014
Business Acquisition [Line Items]
Obligation to pay royalties			later of (i) the expiration of the last to expire patent right related to such product candidate that was transferred in the Transaction and (ii) ten years after the first commercial sale of such product candidate.
Net present value of contingent consideration		$ 84,935
Contingent consideration - fair value adjustments	$ 986,049			$ 1,400,000	$ 1,421,652
Roche Madison
Business Acquisition [Line Items]
Issue of promissory note to Roche		$ 50,000
Issue of Common Stock		1,288,158
Applicable out-license term			90 days		90 days
Percentage of royalty liability			3.00%		3.00%
Cash payments to Roche, minimum			$ 2,500,000		$ 2,500,000
Cash payments to Roche, maximum			$ 6,000,000		$ 6,000,000

Intangible Assets - Additional Information (Detail)	6 Months Ended
Intangible Assets - Additional Information (Detail)	Mar. 31, 2014 USD ($)
Expected Amortization Expense [Line Items]
Amortization period of intangible assets	12 years
Amortization of license agreements in 2014	$ 55,000
Amortization of license agreements in 2015	55,000
Amortization of license agreements in 2016	13,000
Amortization of license agreements, thereafter	$ 0
Licensing Agreements
Expected Amortization Expense [Line Items]
Amortization period of intangible assets	4 years
Patents \| Minimum
Expected Amortization Expense [Line Items]
Amortization period of intangible assets	3 years
Patents \| Maximum
Expected Amortization Expense [Line Items]
Amortization period of intangible assets	20 years

Intangible Assets - Schedule of Intangible Asset (Detail) - USD ($)	6 Months Ended	12 Months Ended
	Mar. 31, 2014	Sep. 30, 2013	Sep. 30, 2012
Finite Lived And Indefinite Lived Intangible Assets [Line Items]
Intangible assets not subject to amortization, beginning balance	$ 3,117,322	$ 3,117,322
Intangible assets not subject to amortization, Amortization
Intangible assets not subject to amortization, ending balance	3,117,322	3,117,322	3,117,322
Intangible assets not subject to amortization, Impairment
Intangible assets subject to amortization, beginning balance	123,191	1,667,247	1,731,211
Amortization	(27,327)	(236,009)	(293,964)
Intangible assets subject to amortization, ending balance	95,864	123,191	1,667,247
Impairment		(1,308,047)
Total Intangible assets, beginning balance	3,240,513	4,784,569	1,731,211
Total Intangible assets, Amortization	(27,327)	(236,009)	(293,964)
Total Intangible assets, ending balance	$ 3,213,186	$ 3,240,513	4,784,569
Roche Madison
Finite Lived And Indefinite Lived Intangible Assets [Line Items]
Intangible assets not subject to amortization, Additions			944,935
Intangible assets subject to amortization, Additions			230,000
Total Intangible assets, Additions			1,174,935
Alvos Therapeutics
Finite Lived And Indefinite Lived Intangible Assets [Line Items]
Intangible assets not subject to amortization, Additions			2,172,387
Intangible assets subject to amortization, Additions
Total Intangible assets, Additions			$ 2,172,387

Investment in Subsidiaries - Additional Information (Detail) - USD ($)	6 Months Ended	12 Months Ended
	Mar. 31, 2014	Sep. 30, 2011	Sep. 30, 2010
Schedule Of Investments [Line Items]
Ownership percentage in subsidiary	100.00%
Issuance of preferred stock in subsidiary		$ 1,618,509	$ 300,000
Calando Pharmaceuticals Inc
Schedule Of Investments [Line Items]
Outstanding Balance of Promissory Note	$ 1,210,000
Amount owed by subsidiary	$ 4,600,000
Stated percentage of notes and advances	8.00%
Percentage of outstanding shares	79.00%
Percentage of investment ownership	76.00%
Ablaris Therapeutics
Schedule Of Investments [Line Items]
Percentage of outstanding shares	64.00%
Percentage of investment ownership	64.00%
Issuance of preferred stock in subsidiary		2,900,000
Investment in preferred stock		1,300,000
Investment in preferred stock by outsider		$ 1,600,000

Notes Payable - Additional Information (Detail) - USD ($)	6 Months Ended
	Mar. 31, 2014	Nov. 26, 2008
Class Of Stock [Line Items]
Unsecured Convertible Promissory Note Agreements		$ 2,500,000
Investment in Notes offering		200,000
Additional investment in Notes offering		600,000
Principal amount of Note not converted into shares		$ 500,000
Offering Note matured date	Nov. 26, 2013
New Note terms	Two times principal payment at maturity
New note interest rate		10.00%
Note interest rate by default	15.00%
Offering Note maturity amount	$ 1,000,000
Accrued interest	$ 210,000
Calando \| Series A Preferred Stock
Class Of Stock [Line Items]
Conversion of Notes and accrued interest in to share	2,950

Stockholders' Equity - Additional Information (Detail)				1 Months Ended					3 Months Ended	6 Months Ended		12 Months Ended				131 Months Ended
Stockholders' Equity - Additional Information (Detail)	Feb. 24, 2014 USD ($) $ / shares shares	Oct. 11, 2013 USD ($) $ / shares shares	Aug. 10, 2012 USD ($) $ / shares shares	May 31, 2013 USD ($) $ / shares shares	Jan. 31, 2013 USD ($) $ / shares shares	Dec. 31, 2012 USD ($) $ / shares shares	Feb. 29, 2012 $ / shares shares	Oct. 31, 2011 USD ($) $ / shares shares	Mar. 31, 2014 USD ($) $ / shares shares	Mar. 31, 2014 USD ($) $ / shares shares	Mar. 31, 2013 USD ($)	Sep. 30, 2013 $ / shares $ / Warrant shares	Sep. 30, 2012 shares	Sep. 30, 2011 USD ($) shares	Sep. 30, 2010 USD ($) shares	Mar. 31, 2014 USD ($) $ / shares shares	Oct. 21, 2011 $ / shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Capital stock authorized for issuance									150,000,000	150,000,000						150,000,000
Common stock, shares authorized									145,000,000	145,000,000		145,000,000				145,000,000
Common stock, par value \| $ / shares									$ 0.001	$ 0.001		$ 0.001				$ 0.001
Preferred stock, shares authorized									5,000,000	5,000,000		5,000,000				5,000,000
Preferred stock, par value \| $ / shares									$ 0.001	$ 0.001		$ 0.001				$ 0.001
Common stock, shares outstanding									51,867,071	51,867,071		32,489,444				51,867,071
Preferred stock, shares outstanding									21,291	21,291		9,900				21,291
Threshold percentage of common stock ownership upon preferred stock conversion									9.99%	9.99%						9.99%
Sale of stock, price per share \| $ / shares		$ 5.86	$ 2.76		$ 2.12	$ 2.26
Aggregate purchase price of preferred shares \| $														$ 1,618,509	$ 300,000
Issuance and sold of Common Stock	6,325,000	3,071,672	2,260,869		1,667,051	1,825,079
Proceeds from issuance of common stock, preferred stock and warrants, net \| $	$ 112,600,000	$ 60,000,000	$ 6,200,000		$ 3,500,000	$ 4,100,000				$ 180,620,980	$ 7,089,327					$ 331,379,995
Unit sold, description			Each unit consisted of one share of common stock and a warrant to purchase		Each unit consisted of one share of common stock and a warrant to purchase	Each unit consisted of one share of common stock and a warrant to purchase
Warrant to purchase share of Common Stock			0.75		0.5	0.5
Common stock exercise price \| $ / shares	$ 18.95		$ 3.25
Exercise price of warrant \| $ / Warrant												1.83
Conversion price \| $ / shares		$ 5.86		$ 1.83
Cash from issuance of equity \| $				$ 36,000,000						$ 172,600,000
Aggregate price on issuance or Sale of equity \| $		$ 64,000,000
Common Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Sale of stock, price per share \| $ / shares				$ 1.83
Issuance and sold of Common Stock				14,300,000						1,869,005		1,182,451	15,511	8,656	225,189
Series A Preferred Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Preferred stock, par value \| $ / shares							$ 0.001										$ 0.001
Sale of stock, price per share \| $ / shares																	$ 1,000
Aggregate purchase price of preferred shares \| $								$ 1,015,000
Number of shares converted in common stock							1,015	1,015
Preferred stock converted to common stock, shares							275,782
Series B convertible preferred stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Sale of stock, price per share \| $ / shares				$ 1,000
Issuance and sold of Common Stock				9,900
Series C Preferred Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Sale of stock, price per share \| $ / shares		$ 1,000
Issuance and sold of Common Stock		46,000
Subscription Agreement
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock, par value \| $ / shares								$ 0.001
Sale of stock, price per share \| $ / shares								$ 3.70
Issuance and sold of Common Stock								675,000
Aggregate purchase price on issuance of common stock to be received \| $								$ 2,497,500
Subscription Agreement \| Series A Preferred Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Issuance and sold of Common Stock								1,015
Limited liability company
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Maximum equity commitment amount under agreement \| $									$ 15,000,000	$ 15,000,000						15,000,000
Equity commitment agreement period									3 years
Cash drawn from facility \| $									$ 1,000,000	$ 1,000,000						$ 1,000,000
2004 Equity Incentive Plan, 2000 Stock Option Plan, and Inducement Grants
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share reserve for issuance									3,451,210	3,451,210						3,451,210

Stockholders' Equity - Summary of Information about Warrants (Detail)	3 Months Ended
	Mar. 31, 2014 $ / Warrant shares	Sep. 30, 2013 $ / Warrant
Class Of Warrant Or Right [Line Items]
Exercise price of warrant \| $ / Warrant		1.83
Number of Warrants \| shares	2,533,507
Warrant 1
Class Of Warrant Or Right [Line Items]
Exercise price of warrant \| $ / Warrant	70.60
Number of Warrants \| shares	94,897
Remaining Life in Years	3 years 1 month 6 days
Warrant 2
Class Of Warrant Or Right [Line Items]
Exercise price of warrant \| $ / Warrant	5.00
Number of Warrants \| shares	995,692
Remaining Life in Years	8 months 12 days
Warrant 3
Class Of Warrant Or Right [Line Items]
Exercise price of warrant \| $ / Warrant	5.09
Number of Warrants \| shares	291,204
Remaining Life in Years	8 months 12 days
Warrant 4
Class Of Warrant Or Right [Line Items]
Exercise price of warrant \| $ / Warrant	1.38
Number of Warrants \| shares	24,324
Remaining Life in Years	1 year 8 months 12 days
Warrant 5
Class Of Warrant Or Right [Line Items]
Exercise price of warrant \| $ / Warrant	4.16
Number of Warrants \| shares	1,000
Remaining Life in Years	2 years 8 months 12 days
Warrant 6
Class Of Warrant Or Right [Line Items]
Exercise price of warrant \| $ / Warrant	3.25
Number of Warrants \| shares	746,306
Remaining Life in Years	2 years 4 months 24 days
Warrant 7
Class Of Warrant Or Right [Line Items]
Exercise price of warrant \| $ / Warrant	2.12
Number of Warrants \| shares	75,000
Remaining Life in Years	3 years 8 months 12 days
Warrant 8
Class Of Warrant Or Right [Line Items]
Exercise price of warrant \| $ / Warrant	1.83
Number of Warrants \| shares	305,084
Remaining Life in Years	3 years 8 months 12 days

Leases - Additional Information (Detail) - USD ($)	6 Months Ended		131 Months Ended
Leases - Additional Information (Detail) - USD ($)	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014
Component Of Operating Other Cost And Expense [Line Items]
Rental expense			$ 4,924,000
Rental expenses include common area maintenance and real estate taxes	$ 15,000
Utilities costs per month	14,000
Increase in total monthly expenditures	71,000
Facility and equipment rent expense	$ 264,000	$ 281,000
Corporate Headquarters In Pasadena
Component Of Operating Other Cost And Expense [Line Items]
Capital lease expiration date	Jul. 31, 2018
Rental expense	$ 22,000
Percentage of increase in annual rental cost	3.00%
Research Facility in Madison
Component Of Operating Other Cost And Expense [Line Items]
Capital lease expiration date	Feb. 28, 2019
Rental expense	$ 23,000
Assets Held under Capital Leases
Component Of Operating Other Cost And Expense [Line Items]
Monthly payments under capital lease	$ 19,000

Leases - Future Minimum Lease Payments under Capitalized Leases (Detail) - USD ($)	Mar. 31, 2014	Sep. 30, 2013
Capital Leased Assets [Line Items]
2014 (remainder of)	$ 114,211
2015	228,420
2016	228,420
2017	228,420
2018	228,420
2019 and thereafter	95,175
Less interest	(45,055)
Principal	1,078,011
Less current portion	(212,234)	$ (221,345)
Capital lease obligation, net of current portion	$ 865,777	$ 1,061,113

Leases - Future Minimum Lease Payments under Operating Leases (Detail)	Mar. 31, 2014 USD ($)
Operating Leased Assets [Line Items]
2014 (remainder of)	$ 234,692
2015	552,028
2016	567,904
2017	583,932
2018	607,437
2019 and thereafter	393,133
Total	$ 2,939,126

Stock-Based Compensation - Additional Information (Detail) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2011
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares reserve for issuance	417,406		417,406
Options granted and outstanding to purchase	3,816,751		3,816,751		3,419,285	1,910,794	729,096
Number of Options Outstanding, Granted			780,000		1,509,166	1,229,500
Options granted outside of Equity Incentive plans			165,000
Stock-based compensation expense			$ 1,719,582	$ 750,782
Fair value of the options granted	$ 7,085,656	$ 103,293
Intrinsic value of the options exercised			$ 3,115,175	$ 0
Dividend yield			0.00%	0.00%
Restricted Stock Units (RSUs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense			$ 570,707	$ 0
Number of restricted stock units issued under 2013 incentive plan	470,000		470,000
Arrowhead
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Pre-tax compensation expense	$ 17,294,117		$ 17,294,117
Weighted average period to recognize pre-tax compensation expense	3 years 6 months
2000 Stock Option Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares reserve for issuance	50,750		50,750
Options granted and outstanding to purchase	50,750		50,750
2004 Equity Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares reserve for issuance	2,735,597		2,735,597
Options granted and outstanding to purchase	2,733,595		2,733,595
Number of Options Outstanding, Granted			0
2013 Incentive plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares reserve for issuance	4,000,000		4,000,000
Options granted and outstanding to purchase	615,000		615,000
Number of Options Outstanding, Granted			615,000

Stock-Based Compensation - Summarize Information about Stock Options (Detail) - USD ($)	6 Months Ended	12 Months Ended
	Mar. 31, 2014	Sep. 30, 2013	Sep. 30, 2012
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of Options Outstanding, beginning balance	3,419,285	1,910,794	729,096
Number of Options Outstanding, Granted	780,000	1,509,166	1,229,500
Number of Options Outstanding, Cancelled	(40,196)		(42,919)
Number of Options Outstanding, Exercised	(342,338)	(675)	(4,883)
Number of Options Outstanding, ending balance	3,816,751	3,419,285	1,910,794
Number of Options Outstanding, Exercisable	1,351,974
Weighted Average Exercise Price Per Share, beginning balance	$ 4.68	$ 6.10	$ 9.03
Weighted Average Exercise Price Per Share, Granted	13.51	2.03	4.40
Weighted Average Exercise Price Per Share, Cancelled	4.68		11.77
Weighted Average Exercise Price Per Share, Exercised	6.54	3.93	5.20
Weighted Average Exercise Price Per Share, ending balance	5.81	$ 4.68	$ 6.10
Weighted Average Exercise Price Per Share, Exercisable	$ 5.91
Weighted Average Remaining Contractual Term	7 years 6 months
Weighted Average Remaining Contractual Term, Exercisable	7 years 2 months 12 days
Aggregate Intrinsic Value	$ 38,622,771
Aggregate Intrinsic Value, Exercisable	$ 14,710,062

Stock-Based Compensation - Assumptions Used to Value Stock Options (Detail) - $ / shares	6 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Dividend yield	0.00%	0.00%
Risk-free interest rate, minimum	1.90%	0.70%
Risk-free interest rate, maximum	2.26%	1.00%
Risk-free interest rate
Volatility	69.00%	69.00%
Weighted average grant date fair value per share of options granted	$ 9.08	$ 1.31
Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Risk-free interest rate
Expected life (in years)	5 years 6 months	5 years 6 months
Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Risk-free interest rate
Expected life (in years)	6 years 3 months	6 years 3 months

Stock-Based Compensation - Summary of Restricted Stock Activity (Detail) - Restricted Stock Units (RSUs)	6 Months Ended
	Mar. 31, 2014 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares, Unvested, beginning of period \| shares
Shares,Granted \| shares	470,000
Shares, Vested \| shares
Shares, Forfeited \| shares
Shares, Unvested, End of period \| shares	470,000
Weighted average grant date fair value, beginning balance \| $ / shares
Weighted average grant date fair value, Granted \| $ / shares	14.54
Weighted average grant date fair value, Vested \| $ / shares
Weighted average grant date fair value, Forfeited \| $ / shares
Weighted average grant date fair value, ending balance \| $ / shares	$ 14.54

Fair Value Measurements - Fair Value Measurements for Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($)	Mar. 31, 2014	Sep. 30, 2013	Sep. 30, 2012
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Acquisition related contingent consideration obligations	$ 1,595,273	$ 1,595,273	$ 173,621
Fair Value, Measurements, Recurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Cash and cash equivalents	142,847,860	19,114,444
Derivative assets
Derivative liabilities	4,936,530	4,096,363
Acquisition related contingent consideration obligations	1,595,273	1,595,273
Fair Value, Measurements, Recurring \| Level 1
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Cash and cash equivalents	142,847,860	19,114,444
Derivative assets
Fair Value, Measurements, Recurring \| Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative assets
Fair Value, Measurements, Recurring \| Level 3
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative assets
Derivative liabilities	4,936,530	4,096,363
Acquisition related contingent consideration obligations	$ 1,595,273	$ 1,595,273

Fair Value Measurements - Additional Information (Detail)	1 Months Ended	6 Months Ended
	Jan. 31, 2011 USD ($) $ / shares	Mar. 31, 2014 USD ($) shares	Sep. 30, 2013 USD ($)
Fair Value Measurements Disclosure [Line Items]
Short term investments \| $		$ 17,798,475	$ 9,030,261
Long-term investments \| $		34,048,359	1,702,153
Total investments \| $		51,846,834	10,732,414
Fair value of investments \| $		$ 51,563,458	$ 10,698,271
Warrants outstanding		2,533,507
Non-cash gain (loss) from change in fair value of the derivative liability \| $		$ 9,234,419
2010 Warrants
Fair Value Measurements Disclosure [Line Items]
Warrants issued to acquire Common Stock		329,649
Warrants outstanding		24,324
2012 Warrants
Fair Value Measurements Disclosure [Line Items]
Warrants issued to acquire Common Stock		912,543
Warrants outstanding		265,461
2013 Warrants
Fair Value Measurements Disclosure [Line Items]
Warrants issued to acquire Common Stock		833,530
Warrants outstanding		39,623
Unidym Inc
Fair Value Measurements Disclosure [Line Items]
Non cash consideration received in sale of interest in subsidiary, bonds \| $	$ 2,500,000
Bond convertible conversion price per share \| $ / shares	$ 2.00
Ablaris Therapeutics
Fair Value Measurements Disclosure [Line Items]
Non-cash gain (loss) from change in fair value of the derivative liability \| $		$ 53,190
Duration of exchange rights		7 years
Exchange right convertible conversion ratio for first year		0.06
Exchange right convertible conversion ratio for second year		0.04
Exchange right convertible conversion ratio for third year		0.03
Exchange right convertible conversion ratio for fourth year		0.02
Exchange right convertible conversion ratio for fifth year and beyond		0.01
Number of exchange right sold		675,000

Fair Value Measurements - Assumptions Used in Valuing Derivative Asset (Detail) - Derivative asset	6 Months Ended	12 Months Ended
	Mar. 31, 2014	Sep. 30, 2013
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Risk free interest rate
Expected life
Dividend yield
Volatility

Fair Value Measurements - Reconciliation of Derivative Asset (Detail) - Derivative asset - USD ($)	6 Months Ended	12 Months Ended
	Mar. 31, 2014	Sep. 30, 2013
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Value, Beginning balance		$ 250,250
Receipt of instruments
Decrease in value		(250,250)
Net settlements
Value, Ending balance

Fair Value Measurements - Assumptions Used in Valuing Derivative Liabilities (Detail)	3 Months Ended	6 Months Ended	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2014	Sep. 30, 2013
2010 Warrants
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Risk free interest rate		0.44%	0.33%
Expected life		2 years	2 years 2 months 12 days
Dividend yield
Volatility		69.00%	69.00%
2012 Warrants
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Risk free interest rate		1.31%	1.39%
Expected life		3 years 8 months 12 days	4 years 2 months 12 days
Dividend yield
Volatility		69.00%	69.00%
2013 Warrants
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Risk free interest rate		1.31%	1.39%
Expected life		3 years 9 months 18 days	4 years 3 months 18 days
Dividend yield
Volatility		69.00%	69.00%
Exchange rights
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Risk free interest rate	1.31%		1.39%
Expected life	3 years 9 months 18 days		4 years 3 months 18 days
Dividend yield
Volatility	69.00%		69.00%

Fair Value Measurements - Reconciliation of Derivative Liability (Detail) - USD ($)	6 Months Ended	12 Months Ended
	Mar. 31, 2014	Sep. 30, 2013	Mar. 31, 2014
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Change in value	$ 9,234,419
Warrant
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Value, Beginning balance	4,091,797	$ 626,195
Issuance of instruments		2,153,819
Change in value	9,234,419	5,066,591
Net settlements	(8,447,443)	(3,754,808)
Value, Ending balance	4,091,797	626,195	$ 4,878,773
Exchange rights
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Value, Beginning balance	4,569	10,375
Issuance of instruments
Change in value	53,190	(5,806)
Net settlements
Value, Ending balance	$ 4,569	$ 10,375	$ 57,759

Fair Value Measurements - Change in Fair Value of Contingent Consideration Obligations (Detail) - USD ($)	Mar. 31, 2014	Sep. 30, 2012
Business Acquisition Contingent Consideration [Line Items]
Purchase price contingent consideration
Contingent consideration payments
Change in fair value of contingent consideration		$ 1,421,652

Stock-Based Compensation - Summary of Restricted Stock Activity (Detail) - Restricted Stock Units (RSUs)	6 Months Ended
	Mar. 31, 2014 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares, Unvested, beginning of period \| shares
Shares,Granted \| shares	470,000
Shares, Vested \| shares
Shares, Forfeited \| shares
Shares, Unvested, End of period \| shares	470,000
Weighted average grant date fair value, beginning balance \| $ / shares
Weighted average grant date fair value, Granted \| $ / shares	14.54
Weighted average grant date fair value, Vested \| $ / shares
Weighted average grant date fair value, Forfeited \| $ / shares
Weighted average grant date fair value, ending balance \| $ / shares	$ 14.54